EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615398
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 conveyor belts on 4 October 2006.
Instrument
TCO No 0615398 was made on 22 December 2006. It declares that those certain conveyor belts 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. 0615398 is taken to have come into force on 4 October 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 managing customs duties and associated regulations. This Act enables the Chief Executive Officer of Customs to establish Tariff Concession Orders (TCOs) under Part XVA, which lower the customs duty rate for specific goods. The policy objective is to facilitate access to imported goods that are not produced in Australia, thereby supporting industries that rely on these imports. Tariff Concession Instrument No. 0615398 was introduced to address the need for tariff relief on certain conveyor belts, following an application by Bluescope Steel Ltd. The instrument was enacted to ensure that these specific conveyor belts, which are not produced domestically and do not have substitutable Australian-made alternatives, benefit from a reduced customs duty rate of 0%, down from the standard rate of 5%. The instrument came into effect on the date of application, 4 October 2006, and allows importers of these goods to apply for duty refunds from that date.
Scope and Application
The Tariff Concession Instrument No. 0615398, pursuant to the Customs Act 1901, applies to specific goods for which an applicant, such as Bluescope Steel Ltd, has requested a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. This Act provides a mechanism through which certain goods can be subject to a lower rate of customs duty if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. The instrument is designed to benefit the rights of importers by potentially reducing the duty on imported goods, in this case conveyor belts, from the general rate of 5% to 0%. The Act operates on a Commonwealth level and its application is not restricted by geographical or jurisdictional boundaries within Australia, extending to all importers and entities involved in the importation of the specified goods. However, the Act does not apply to goods listed in section 269SJ of the Customs Act 1901, which excludes certain goods from tariff concessions. The instrument was made effective from the date the application was lodged, 4 October 2006, and the CEO is required to consult with the public, inviting submissions on the proposed TCO, although no submissions were received in this instance.
Key Provisions
The Customs Act 1901, specifically within Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act allows for the application of lower rates of customs duty on goods that are the subject of a TCO, which can be applied for by a person under section 269F. For a TCO to be considered, the goods must not fall under the category specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C outlines the core criteria for a TCO, requiring that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are provided in sections 269D, 269E, and 269B respectively.
The obligations imposed by the Act on parties, such as Bluescope Steel Ltd, include meeting the core criteria for a TCO, which necessitates demonstrating that no substitutable goods were produced in Australia at the time of the application. The CEO is required to make a written order if satisfied that the application meets these criteria. This process includes publishing a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made. For Bluescope Steel Ltd's application regarding certain conveyor belts, the CEO determined that no substitutable goods were produced in Australia and issued TCO No. 0615398, which specifies that these goods are subject to a zero percent duty rate as opposed to the general rate of 5%.
The Act also delineates the consequences of breaching its provisions. While specific offences, penalties, or civil/criminal consequences are not detailed in the provided text, the general legal framework of the Customs Act 1901 would apply. Typically, breaches of customs regulations can result in substantial penalties, including fines and imprisonment, depending on the severity and intent behind the breach. The Act ensures that the rights of persons, excluding the Commonwealth, are not adversely affected by the TCO, and it explicitly states that no new liabilities are imposed on any person. Importers of the affected goods are granted the right to apply for a refund of duty paid on these goods from the date the TCO came into force.