EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615052
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.
Electrolux Home Products Pty Ltd applied for a TCO in respect of certain steel on 26 September 2006.
Instrument
TCO No 0615052 was made on 5 February 2007. It declares that those certain steel 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. One submission objecting to the TCO application was received from Bluescope Steel Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Bluescope Steel Ltd, Bisalloy Steels Pty Ltd to lodge a written submission.
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. 0615052 is taken to have come into force on 26 September 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 Australian Parliament, provides a framework for the administration of customs and excise duties, including a scheme for Tariff Concession Orders (TCOs). This instrument aims to address the gap in tariff structures by allowing the Chief Executive Officer of Customs to reduce customs duty on certain imported goods, provided no substitutable goods are produced in Australia. The policy objective is to promote fair competition and support specific industries by lowering the cost of imported materials. In this instance, Tariff Concession Instrument No. 0615052 was introduced on 5 February 2007, reducing the duty on certain steel products from 5% to 0%. This measure was taken after Electrolux Home Products Pty Ltd applied for the concession, and following consultations, including submissions from Bluescope Steel Ltd and Bisalloy Steels Pty Ltd, the CEO determined that no substitutable goods were produced domestically, thus satisfying the core criteria for the concession.
Scope and Application
The Tariff Concession Instrument No. 0615052 under the Customs Act 1901 applies to entities and individuals who import goods eligible for tariff concessions, specifically those who have applied for and are granted a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs to grant TCOs, which lower the customs duty rate on certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This concession is beneficial for importers of the specified goods, who can apply for a refund of duties paid since the date the TCO was deemed to come into effect. The scope of this legislation is national, as it falls under the Commonwealth's purview. However, it does not affect the rights of any person, other than the Commonwealth, in relation to actions taken before the registration of the TCO, ensuring that no one is disadvantaged or incurs liabilities as a result of the concession. Any exclusions or exemptions are strictly governed by the criteria set out in the Customs Act 1901, particularly in sections 269C, 269D, and 269E, which define the conditions under which a TCO can be issued.
Key Provisions
The Tariff Concession Instrument No. 0615052 under the Customs Act 1901 allows for the application of a lower customs duty rate on specified goods, provided certain criteria are met. Section 269F (1) of the Act enables an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). The CEO must assess whether the application complies with the core criteria set out in section 269C of the Act, which include the absence of substitutable goods produced in Australia at the time of the application. If these criteria are satisfied, the CEO is required to issue a written TCO under section 269P (3) of the Act, which specifies the reduced duty rate on the goods.
The Act imposes several obligations on the parties involved in the TCO process. Under section 269K (1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is deemed valid. This ensures transparency and allows for opposition from parties that may have a vested interest in the outcome. Section 269M (1) also mandates that the CEO may directly invite specific parties to submit written objections if there is a likelihood of opposition to the TCO. These obligations ensure that the TCO process is fair and considers all relevant perspectives before a concession is granted.
The Act delineates specific consequences for non-compliance and breach of its provisions. While the explanatory statement does not detail civil or criminal penalties for breaches related to the TCO process, it is understood that violations of the Customs Act 1901 can lead to significant penalties. For instance, section 160 of the Act stipulates that offences against the Act can result in fines and imprisonment. The exact penalties would depend on the nature and severity of the offence, with the potential for substantial fines and imprisonment terms for serious violations. The Act's overarching objective is to ensure compliance and the fair administration of customs duties.