EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612054
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 strip paint line parts on 19 July 2006.
Instrument
TCO No 0612054 was made on 13 October 2006. It declares that those certain continuous strip paint line 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. 0612054 is taken to have come into force on 19 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise within Australia. Among its provisions, Part XVA addresses the application and creation of Tariff Concession Orders (TCOs), which aim to lower customs duties on specified goods under certain conditions. This mechanism was introduced to address the gap where some industries could benefit from tariff reductions to remain competitive, particularly in cases where no suitable Australian-made substitutes exist. The Tariff Concession Instrument No. 0612054, made on 13 October 2006, exemplifies this legislative intent by granting tariff concessions to Bluescope Steel Limited for certain continuous strip paint line parts, reducing their duty rate from 5% to free, effective from 19 July 2006. This instrument was crafted following an application by the company and subsequent determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, meeting the core criteria set out in the Act.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to applications for TCOs by individuals or entities seeking lower customs duty rates for specific goods, provided these goods are not those listed in section 269SJ of the Act, which outlines goods ineligible for TCOs. A TCO is applicable if, at the time of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, and 269E of the Act. The scope of the Act is national, operating across all states and territories within Australia. The application process requires public notification and consultation, as stipulated in section 269K(1) of the Act, which mandates the CEO to publish notices in the Gazette and invite submissions from interested parties. However, the TCO does not retroactively affect the rights of any person, nor does it impose liabilities for actions taken prior to its registration. Instead, it grants benefits to importers, allowing them to apply for duty refunds for goods imported from the date the TCO is considered effective.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0612054) relate to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application meets the core criteria, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269C stipulates that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also ensure that the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO.
The obligations imposed by this legislation on the parties it governs include the requirement for the CEO to assess the validity of a TCO application and determine if it meets the core criteria. If the CEO is satisfied that the application meets the criteria and no submissions are received against the order, the CEO must make the TCO. Section 269K(1) also requires the CEO to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made. Additionally, under section 269S(1), a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
There are no explicit offences, penalties, or civil/criminal consequences outlined in this particular legislation for breach of the TCO provisions. However, it is important to note that the Act and Regulations provide for general penalties for breaches of customs laws, which may include fines and imprisonment. For instance, under section 202 of the Customs Act 1901, a person who contravenes the Act may be liable to a penalty of up to 10,000 penalty units or imprisonment for up to 10 years, or both, for serious offences. The specifics of penalties for breaches of TCO provisions would need to be examined in the context of the broader Customs Act 1901 and related regulations.