EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613890
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 Ltd applied for a TCO in respect of certain continuous steel strip paint line parts on 18 August 2006.
Instrument
TCO No 0613890 was made on 10 November 2006. It declares that those certain continuous steel 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 0%.
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. 0613890 is taken to have come into force on 18 August 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 Tariff Concession Instrument No. 0613890 was enacted in 2006 under the Customs Act 1901 to address the issue of providing tariff concessions for specific goods. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs (CEO) to grant TCOs, which reduce the customs duty on particular goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The objective of this instrument is to ensure that eligible goods, such as certain continuous steel strip paint line parts, receive appropriate tariff concessions, thereby promoting trade and economic efficiency. The instrument was enacted by the relevant federal authority, in accordance with the legislative process, and it came into effect on the date the application was lodged, which was 18 August 2006.
Scope and Application
The Customs Act 1901, as amended and detailed in Tariff Concession Instrument No. 0613890, governs the application and scope of tariff concessions for certain goods. This legislation applies to individuals and entities, such as Bluescope Steel Ltd, that seek tariff concessions for specific goods not produced in Australia in the ordinary course of business. The act extends to the national jurisdiction of Australia and applies to the concessions on customs duty for particular goods, which in this instance are certain continuous steel strip paint line parts. The geographic reach of this act is national, impacting all entities involved in the importation of these goods across Australia. There are exclusions under section 269SJ of the Act, which specify goods that cannot be subject to a tariff concession order. The act can be extended or restricted through subordinate instruments, allowing for flexibility in its application to different types of goods and industries. The commencement of the TCO is effective from the date the application was lodged, ensuring timely implementation of the tariff concessions.
Key Provisions
The key provisions of the Customs Act 1901, as implemented by Tariff Concession Instrument No. 0613890, are primarily concerned with the establishment and administration of Tariff Concession Orders (TCOs) for certain goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided these goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess the application against the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. A TCO application meets the core criteria if it satisfies the definitions and conditions outlined in sections 269B, 269D, 269E, and 269P(3).
The obligations imposed on parties or entities governed by the Act include the requirement for applicants to ensure their applications meet the specified criteria, including the absence of substitutable goods produced in Australia. The CEO has a duty to review applications and determine whether they meet the core criteria. If a TCO application is approved, the CEO must issue a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. In this instance, the CEO made a TCO for certain continuous steel strip paint line parts, applying item 50 of Schedule 4, which sets the duty rate at 0% instead of the general rate of 5%.
The Act does not explicitly outline specific offences or penalties for breaches related to the application and administration of TCOs. However, failure to comply with the conditions and requirements of the Act and the TCOs could potentially lead to disputes or legal actions, which might be addressed under other relevant provisions of the Customs Act 1901 or related legislation. In such cases, the penalties would depend on the specific breach and the applicable laws governing customs and tariffs. The TCO itself ensures that the rights of importers are beneficially affected and that no existing liabilities are imposed on individuals or entities other than the Commonwealth.