EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609977
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 continuous steel strip paint line cylinders and/or rolls on 05 June 2006.
Instrument
TCO No 0609977 was made on 18 August 2006. It declares that those certain continuous steel strip paint line cylinders and/or rolls 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 5%. 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. 0609977 is taken to have come into force on 05 June 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 Tariff Concession Instrument No. 0609977, enacted in 2006 under the Customs Act 1901, addresses the issue of granting tariff concessions for specific goods that are not produced in Australia. This instrument was introduced to provide relief from customs duties on imported goods that have no local alternatives, thereby promoting competition and economic efficiency. The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who must ensure that the application for such a concession meets certain criteria, including the absence of substitutable goods in Australia. In this particular case, Bluescope Steel Limited successfully applied for a TCO concerning certain continuous steel strip paint line cylinders and rolls, resulting in a zero percent duty rate for these goods, which contrasts with the general rate of 5%. This legislative measure ensures that the rights of importers are protected and can benefit from duty refunds for goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0609977, issued under the Customs Act 1901, applies specifically to certain continuous steel strip paint line cylinders and/or rolls. The instrument was enacted in response to an application by Bluescope Steel Limited, and it grants tariff concessions by reducing the duty on these goods from 5% to free. This concession applies on a national level, effectively across all states and territories of Australia, and impacts the importation of the specified goods. The instrument’s application is contingent upon the condition that no substitutable goods are produced in Australia in the ordinary course of business, as stipulated under section 269C of the Act. The instrument does not affect any existing rights or liabilities of persons other than the Commonwealth, nor does it impose new liabilities on any person. Furthermore, the instrument came into effect on the date of the application, 05 June 2006, thereby allowing importers to apply for a refund of duty on goods imported since that date under the Customs Tariff Act 1995.
Key Provisions
The Tariff Concession Instrument No. 0609977, which pertains to the Customs Act 1901, establishes a tariff concession order (TCO) for certain continuous steel strip paint line cylinders and/or rolls, effectively reducing the customs duty on these goods from 5% to free (sections 269C, 269P(3), and Schedule 4 of the Customs Tariff Act 1995). This concession applies from the date the application for the TCO was lodged, which was 5 June 2006 (subsection 269S(1)). This TCO was issued following an application by Bluescope Steel Limited on the same date, and the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business, thereby meeting the core criteria for the concession (section 269C).
Under this legislation, the CEO has a duty to ensure that the application for a TCO aligns with the criteria outlined in section 269C of the Customs Act 1901. This involves verifying that the goods in question are not substitutable by any Australian-produced goods in the ordinary course of business. Once the CEO is satisfied with the application and meets the core criteria, they must issue a written TCO (subsection 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person to submit reasons why the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received.
For the entities governed by this legislation, the primary obligation is to ensure compliance with the conditions set out for the tariff concession. Importers of the specified goods will benefit from the reduced duty rate and may apply for a refund of duty paid on imports since the TCO came into effect (paragraph 126(1)(r) of the Regulations). The legislation explicitly states that the TCO does not affect the rights of any person, except the Commonwealth, nor does it impose any liabilities on any person (subsection 269S(1)).
In terms of penalties and consequences, the Customs Act 1901 does not explicitly state penalties for non-compliance with the provisions of the TCO. However, any breaches of related customs regulations or fraudulent claims for tariff concessions could lead to civil or criminal penalties under other sections of the Customs Act 1901. Such penalties could include fines and imprisonment, depending on the nature and severity of the breach.