EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611860
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 paint line, oven and afterburner ducts parts on 14 July 2006.
Instrument
TCO No 0611860 was made on 06 October 2006. It declares that those certain continuous paint line, oven and afterburner ducts 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. 0611860 is taken to have come into force on 14 July 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 Parliament of Australia, addresses the need for a structured approach to managing customs duty on imported goods, particularly by providing for tariff concession orders (TCOs) under Part XVA. This legislative framework enables the Chief Executive Officer of Customs to grant tariff concessions on specific goods, thereby reducing the customs duty rate for those items. Instrument No. 0611860, made under the Customs Act 1901, is an example of this mechanism in action, where a concession was granted to Bluescope Steel Limited for certain continuous paint line, oven and afterburner ducts parts. This concession was made effective from the date the application was lodged, 14 July 2006, and aimed to benefit importers by potentially allowing them to claim a refund of duty paid on these goods since that date. The policy objective underpinning this concession is to facilitate trade by reducing the financial burden on importers, thus encouraging the import of these specific goods without any adverse impact on existing rights or liabilities.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to entities or individuals seeking tariff concessions for specific goods, provided those goods are not specified in section 269SJ, which excludes certain goods from TCO eligibility. The application process requires that, on the day the application is lodged, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. This geographic scope applies across Australia under the Commonwealth’s jurisdiction. Once a TCO is approved and published, it applies retroactively from the date of the application, thereby not disadvantaging or imposing liabilities on any person other than the Commonwealth for actions prior to the order's registration. Notably, the TCO allows for the free importation of specified goods, in this case, certain continuous paint line, oven, and afterburner ducts parts, which otherwise attract a 5% duty rate.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0611860 under the Customs Act 1901 (the Act) include sections 269C, 269F, 269P, and 269SJ. Section 269F permits a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, including that no substitutable goods are produced in Australia, the CEO must make a TCO. Section 269C stipulates the core criteria for a TCO application, and section 269P details the procedure for the CEO to make a written TCO if the criteria are met. Section 269SJ lists the goods that cannot be subject to a TCO.
The Act imposes certain obligations and requirements on parties and entities it governs. The CEO must ensure that an application for a TCO is not in respect of goods specified in section 269SJ. Upon accepting a TCO application as valid, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO must also consider any submissions received before making a TCO. Importers of the goods subject to the TCO can apply for a refund of duty under the Regulations.
Any failure to comply with the requirements of the Act may result in various civil or criminal consequences. However, the Explanatory Statement does not explicitly outline the specific offences, penalties, or consequences for breaches of the Act in this context. Generally, under the Customs Act 1901, breaches may result in fines and, in severe cases, criminal prosecution. The maximum penalties can vary depending on the nature and severity of the breach.
Tariff Concession Instrument No. 0611860, which came into force on 14 July 2006, applies a free rate of duty on certain continuous paint line, oven, and afterburner ducts parts, previously subject to a general rate of duty of 5%. The TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted before the date of registration. Importers of these goods can apply for a refund of duty on goods imported since the day the TCO came into force.