EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616283
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 vacuum degass vessel parts on 30 August 2006.
Instrument
TCO No 0616283 was made on 01 December 2006. It declares that those certain vacuum degass vessel 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. 0616283 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This legislation was introduced to address the need for a mechanism to provide tariff concessions on specific goods, allowing for reduced customs duty rates under certain conditions. Specifically, section 269F of the Act allows for the application of lower customs duty rates if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. Bluescope Steel Limited applied for such a concession in respect of certain vacuum degass vessel parts, and following a determination by the CEO that the core criteria were met, TCO No. 0616283 was issued, declaring that these goods are subject to a zero rate of duty. The policy objective, as outlined in the explanatory statement, is to provide tariff relief that benefits importers without disadvantaging existing rights or imposing new liabilities on any party.
Scope and Application
The Customs Act 1901 applies to individuals, entities, and industries involved in the importation and exportation of goods within Australia, establishing a framework for customs duty and tariff concessions. Specifically, the Act governs the process under which Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs (CEO), allowing for reduced or waived customs duties on certain goods. This mechanism is available to any person who meets the core criteria outlined in the Act, such as demonstrating that no substitutable goods are produced in Australia. The scope of the Act is national, applying across all states and territories of Australia. The Act excludes certain goods from being subject to a TCO, as specified in section 269SJ, and it includes provisions for consultation and public notice before a TCO is made. Any TCO made under the Act does not retroactively affect the rights or liabilities of any person, except for the Commonwealth, with respect to actions taken before the TCO was registered. The application and interpretation of the Act can be extended through subordinate instruments, such as the Customs Tariff Act 1995, which details the specific tariff rates and schedules applicable to imported goods.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to this Tariff Concession Order (TCO) include sections 269C, 269B, 269D, 269E, and 269P, among others. Section 269C requires that the Chief Executive Officer (CEO) of Customs determine if an application for a TCO meets the core criteria, which is defined as no substitutable goods being produced in Australia in the ordinary course of business on the day the application was lodged. This is further detailed in sections 269B, which define the terms used in section 269C, including 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the CEO is satisfied that the application meets the criteria, they must make a written order under section 269P(3), which declares that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate.
The obligations imposed by the Act on the parties involved primarily rest with the CEO of Customs. The CEO is required to assess whether an application for a TCO meets the core criteria, which involves ensuring that no substitutable goods are produced in Australia on the day the application was lodged. If the application is valid, the CEO must make a written TCO declaring that the goods are subject to a reduced customs duty rate. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as valid, as per subsection 269K(1) of the Act.
There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of the provisions in this explanatory statement. However, if an entity or individual were to provide false information in an application for a TCO, this could potentially lead to legal consequences under general provisions of the Customs Act 1901, which may include fines and imprisonment for fraudulent activities. The penalties for such offences would be in accordance with the general penalties outlined in the Customs Act 1901.