EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612478
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 x-ray thickness gauge chillers on 26 July 2006.
Instrument
TCO No 0612478 was made on 13 October 2006. It declares that those certain x-ray thickness gauge chillers 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. 0612478 is taken to have come into force on 26 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, includes provisions for the creation of Tariff Concession Orders (TCOs) to apply lower rates of customs duty on certain goods. Specifically, Part XVA of the Act provides a framework under which the Chief Executive Officer of Customs (CEO) can grant these concessions, ensuring that such reductions are applied only when no suitable substitute goods are produced in Australia. The Tariff Concession Instrument No. 0612478, issued on 13 October 2006, aims to address a specific need by providing a concession for certain x-ray thickness gauge chillers, which were determined not to have substitutable goods produced in Australia. Consequently, this instrument lowers the duty rate from the general rate of 5% to free, effective from 26 July 2006, the date the application was lodged. The instrument was created following a valid application by Bluescope Steel Limited and no objections were received from the public following the required Gazette notice.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This mechanism allows for the application of lower rates of customs duty on specific goods, contingent upon meeting certain core criteria. These criteria, as outlined in section 269C, necessitate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. A notable exclusion under section 269SJ specifies certain goods that cannot be subject to a TCO. The geographic reach of this Act is national, as it applies across Australia, with the CEO being the sole authority for making TCOs under section 269F. Any application for a TCO is subject to public consultation, as required by subsection 269K(1), although no objections were raised in the case of TCO No. 0612478. This TCO came into force on 26 July 2006, the date the application was lodged, and it benefits importers by potentially allowing them to claim refunds on duties paid prior to its effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not retroactively disadvantage or impose liabilities on any person.
Key Provisions
The Tariff Concession Instrument No. 0612478 under the Customs Act 1901 (sections 269C, 269F, 269K(1), and 269S) establishes a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply lower rates of customs duty to specific goods, provided they meet certain criteria. Section 269F allows an individual or entity to apply to the CEO for a TCO concerning particular goods. The CEO must then assess whether the application complies with the core criteria set out in section 269C. For the CEO to make a TCO, it must be confirmed that no substitutable goods were produced in Australia at the time the application was made, as defined in section 269D (goods produced in Australia), section 269E (ordinary course of business), and section 269P(3) (substitutable goods). If these criteria are satisfied, the CEO issues a written order, declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies, thus reducing the customs duty rate.
The obligations imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that the application is valid and not in respect of goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO has a duty to publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO (subsection 269K(1)). This ensures transparency and provides an opportunity for interested parties to voice any concerns regarding the application. The TCO also requires that it not affect the rights of any person adversely as at the date of registration, ensuring that any existing rights or obligations are preserved.
Failure to comply with the requirements of the Customs Act 1901 regarding TCOs could result in civil or criminal consequences, although specific offences and penalties are not detailed in the explanatory statement. The act of applying for or obtaining a TCO under false pretences, or misusing the concessions, might lead to penalties. However, the precise penalties for non-compliance are not explicitly stated within the explanatory statement. The act also ensures that the TCO does not impose any new liabilities on individuals or entities, protecting them from any financial burdens arising from the application of the TCO.