EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609297
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Bluescope Steel Limited applied for a TCO in respect of certain oil film bearing flow restrictors on 30 May 2006.
Instrument
TCO No 0609297 was made on 11 August 2006. It declares that those certain oil film bearing flow restrictors are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 10%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0609297 is taken to have come into force on 30 May 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was amended to include Tariff Concession Orders (TCOs) under Part XVA, allowing for reduced customs duty rates on specified goods. Enacted by the Australian Parliament, this legislation aims to provide relief to importers of goods that do not have substitutable products produced in Australia. The primary objective is to encourage the importation of goods by lowering tariff barriers, thus promoting economic efficiency and competition within the market. The CEO of Customs evaluates applications for TCOs, ensuring that they meet the core criteria, such as the absence of substitutable goods produced domestically. This instrument was introduced to address the gap in providing tariff concessions to importers of certain goods, thereby facilitating smoother trade and benefiting the importing community.
Scope and Application
The Customs Act 1901, through Part XVA, provides a mechanism for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to certain goods. These orders can be applied for by any person and are subject to specific criteria, such as the absence of substitutable goods being produced in Australia in the ordinary course of business. The Act specifies that the general application of these orders is in relation to goods, with the scope extending to entities involved in the importation of these goods. The geographic reach of the Act is nationwide, given its Commonwealth jurisdiction, but the application of TCOs is specifically tailored to the goods listed in the Customs Tariff Act 1995. Certain goods are excluded from TCOs as per section 269SJ of the Customs Act 1901. The Act allows for the application of TCOs to be extended or restricted through subordinate instruments, providing flexibility in its implementation and enforcement.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0609297 under the Customs Act 1901 (section 269C) involve the granting of Tariff Concession Orders (TCO) by the Chief Executive Officer (CEO) of Customs. When an application is made for a TCO (section 269F), the CEO must first determine whether the application is in respect of goods not listed in section 269SJ, which excludes certain goods from being subject to a TCO. The CEO then assesses whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the criteria are met, the CEO must issue a written order declaring that the goods in question are subject to a prescribed tariff item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
In this instance, Bluescope Steel Limited applied for a TCO concerning certain oil film bearing flow restrictors on 30 May 2006, which was granted on 11 August 2006 (section 269P(3)). This TCO declared that these specific goods are subject to item 50 of Schedule 4, which sets the duty rate at free, down from the general rate of 10%. The CEO's decision to grant the TCO was based on the finding that no substitutable goods were produced in Australia.
Under the Customs Act, the CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received in response to the notice, allowing the process to proceed without opposition. The TCO is effective from the date the application was lodged, 30 May 2006 (subsection 269S(1)), and it does not adversely affect any rights or impose liabilities on persons other than the Commonwealth with respect to actions taken before the TCO's registration date. Importers of the affected goods will benefit from the TCO, as they can apply for duty refunds on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
The Customs Act imposes penalties for non-compliance with the provisions of the TCO. If any party fails to comply with the conditions set out in the TCO, they may face civil or criminal consequences. The maximum penalties for breaches can include fines and imprisonment, as outlined in relevant sections of the Customs Act and associated regulations. The specific penalties depend on the nature and severity of the breach, with the Act providing for both civil remedies and criminal sanctions to enforce compliance.