EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610076
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 roll end coupling parts on 09 June 2006.
Instrument
TCO No 09 June 2006 was made on 25 August 2006. It declares that those certain roll end coupling parts 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. 0610076 is taken to have come into force on 09 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the imposition of customs duties on imported goods. Part XVA of this Act introduced the scheme for Tariff Concession Orders (TCOs), which allows the Chief Executive Officer of Customs to grant tariff concessions on specific goods under certain conditions. This initiative was designed to address the gap where businesses might need lower customs duties for specific goods to remain competitive in the market, particularly where such goods are not produced in Australia. The Tariff Concession Instrument No. 0610076, issued on 25 August 2006, exemplifies this scheme by granting Bluescope Steel Limited a concession on certain roll end coupling parts, reducing the duty rate from 5% to free. The instrument was introduced following a successful application by Bluescope Steel Limited and no objections from the public, as required by the Act. The policy objective is to facilitate trade and economic efficiency by allowing duty-free imports of non-substitutable goods, thereby benefiting importers and potentially lowering consumer prices.
Scope and Application
The Tariff Concession Instrument No. 0610076 applies to the specific goods identified in the instrument, namely certain roll end coupling parts, as determined by the Chief Executive Officer of Customs (CEO) under the Customs Act 1901. This legislation is designed to provide tariff concessions for goods that are not substitutable by goods produced in Australia. The Act applies to any entity or individual seeking to import these particular goods, and it affects the customs duty rates applicable to these goods, reducing the duty to zero for the concession. The scope of the Act extends across the Commonwealth of Australia, as it is an instrument under the Customs Act 1901, which is a federal law. There are specific exclusions in the Act, notably the goods listed in section 269SJ, which cannot be subject to a Tariff Concession Order (TCO). The CEO is mandated to consult with interested parties and publish a notice in the Gazette inviting submissions, although in this case, no submissions were received. The TCO does not retroactively disadvantage or impose liabilities on persons other than the Commonwealth for actions taken prior to the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0610076 under the Customs Act 1901 (the Act) concern the application and approval process for tariff concessions on specific goods. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) if the goods in question do not fall under the restricted category outlined in section 269SJ. If the application is deemed valid, the CEO must then determine if the application meets the core criteria specified in section 269C. This involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged, with definitions for key terms provided in sections 269D, 269E, and 269F.
The Act imposes several obligations on the parties involved. The CEO must make a written TCO if the application meets the core criteria, specifying the particular goods and the applicable tariff concession. Additionally, as per subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed. This ensures a level of transparency and opportunity for public input. In this specific case, Bluescope Steel Limited applied for a TCO on 09 June 2006, and the CEO was satisfied that the application met all necessary criteria, resulting in the issuance of TCO No. 0610076 on 25 August 2006.
The Act also outlines potential civil and criminal consequences for breaches. Although the specific penalties for non-compliance with TCO provisions are not detailed in the explanatory statement, breaches of the Customs Act generally can lead to significant penalties. Under Australian law, unauthorised importation or exportation of goods can result in criminal charges, with penalties including substantial fines and, in severe cases, imprisonment. For civil penalties, incorrect declarations or fraudulent activities related to customs can lead to fines and other financial penalties as stipulated by the Act.
The explanatory statement clarifies that TCO No. 0610076 came into effect on the date the application was lodged, 09 June 2006, as per subsection 269S(1). Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before its registration. This ensures that the rights of importers are protected, allowing them to apply for duty refunds on goods imported since the effective date of the TCO. Overall, the legislation aims to streamline the process for obtaining tariff concessions while ensuring compliance and fairness in the application of customs duties.