EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610134
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 rolling mill DC motors on 09 June 2006.
Instrument
TCO No 0610134 was made on 25 August 2006. It declares that those certain rolling mill DC motors 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. 0610134 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 was enacted to provide for the regulation of customs and excise, including the imposition of customs duty and the administration of the Customs Tariff. The Tariff Concession Instrument No. 0610134 was introduced to address the specific needs of Bluescope Steel Limited, which sought a tariff concession for certain rolling mill DC motors. The instrument was developed in response to an application made by Bluescope Steel Limited on 09 June 2006, and was enacted to provide a concession that reduces the rate of customs duty on these goods from the general rate of 5% to free. This was made possible under section 269C of the Act, which stipulates that if the Chief Executive Officer of Customs is satisfied that no substitutable goods were produced in Australia, a Tariff Concession Order (TCO) can be made. The instrument was published in the Gazette, inviting submissions from any interested parties, though none were received. The TCO came into effect on the date the application was lodged and does not affect the rights of any person as at the date of registration, while providing benefits to importers of these goods by allowing them to apply for a refund of duty.
Scope and Application
The Tariff Concession Instrument No. 0610134 under the Customs Act 1901 applies specifically to certain rolling mill DC motors as designated by Bluescope Steel Limited, who submitted an application for a Tariff Concession Order (TCO) on 09 June 2006. The Act provides a mechanism whereby the Chief Executive Officer of Customs (CEO) can make TCOs, which apply lower rates of customs duty on specified goods. The scope of the Act extends to any person or entity that imports the specified goods and wishes to avail themselves of the reduced tariff rate. The geographic reach of this Act is national, applying across Australia as it is a Commonwealth Act. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The Act may also be extended or restricted through subordinate instruments, although in this case, no further modifications to the application of the Act are noted. The TCO does not retroactively affect the rights of any person, meaning it does not impose liabilities or disadvantage anyone in relation to actions taken before the TCO's effective date of 09 June 2006. Importers of the specified goods stand to benefit from the reduced duty rates and can apply for refunds of duties paid on imports since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0610134, issued under the Customs Act 1901, establishes a concession on customs duty for certain rolling mill DC motors. This instrument (Section 269F) allows the Chief Executive Officer (CEO) of Customs to grant a Tariff Concession Order (TCO) for these motors, resulting in a duty rate of free instead of the general rate of 5% (Section 269P(3)). The eligibility for a TCO hinges on the core criteria outlined in the Act, specifically whether no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (Section 269C).
Entities or individuals seeking such a concession must adhere to the procedures stipulated by the Act. They must apply to the CEO and ensure their application does not pertain to goods listed in section 269SJ of the Act, which are ineligible for a TCO. Upon receiving a valid application, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties (Section 269K(1)). In this case, no submissions were received, allowing the CEO to proceed with the TCO.
The TCO comes into force on the date the application is lodged, which in this instance was 09 June 2006 (Section 269S(1)). Importantly, the TCO does not affect any rights or impose liabilities on persons other than the Commonwealth in respect of actions taken before the TCO's registration date. Importers of the specified motors benefit from the concession and can apply for refunds of any duty paid since the TCO's effective date (Paragraph 126(1)(r) of the Regulations).
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in legal consequences. While the specific penalties for breaches are not detailed in the explanatory statement, general provisions within the Act may include fines or imprisonment for wilful or negligent breaches. The Act also allows for civil remedies where a party suffers loss due to non-compliance. The precise penalties would be determined in accordance with the applicable laws governing such breaches.