EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618605
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 continuous steel strip paint line parts on 17 November 2006.
Instrument
TCO No 0618605 was made on 09 February 2007. 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 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. 0618605 is taken to have come into force on 17 November 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, through its Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which apply lower rates of customs duty on specified goods. Enacted by the Commonwealth Parliament, this legislation was introduced to address the need for flexibility in the application of customs duties, particularly in instances where goods are not produced in Australia or where there are no suitable substitutes available domestically. The policy objective of the Act, as indicated, is to ensure that the concessional tariff rates are applied fairly and do not disadvantage any person by imposing liabilities or affecting rights adversely as of the date of registration. Instrument No. 0618605, made under this Act, is an example of such concessions applied to certain continuous steel strip paint line parts, effectively providing a zero rate of duty in recognition that no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901, as outlined in Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on specified goods. This Act applies to any person or entity that wishes to apply for a TCO for goods not listed in section 269SJ, which specifies goods that cannot be subject to a TCO. The Act requires that for a TCO application to be considered, no substitutable goods must be produced in Australia at the time of application, according to the definitions provided in sections 269D, 269E, and 269F. The jurisdiction of this Act is national, extending across Australia, as it is a Commonwealth Act. The application and issuance of TCOs do not disadvantage any person other than the Commonwealth and do not impose any liabilities on any person for actions taken prior to the TCO's effective date. The application process involves a mandatory publication in the Gazette inviting submissions, although in this instance, no submissions were received. The application for a TCO, such as Tariff Concession Order No. 0618605 for certain continuous steel strip paint line parts, is effective from the date the application is lodged. The CEO’s decision to issue a TCO is subject to consultation and finalisation through subordinate instruments as outlined in the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901, under its Part XVA, provides a mechanism through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). A TCO results in a lower rate of customs duty being applied to the specified goods. A person may apply for a TCO in relation to certain goods under section 269F of the Act, provided that the goods are not specified in section 269SJ, which outlines the types of goods that cannot be subject to a TCO. The CEO must then decide whether the application meets the core criteria (section 269C). These criteria are met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The meanings of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are further defined in sections 269D, 269E, and 269F of the Act, respectively. If the CEO is satisfied that the application meets these criteria, they must issue a written order (the TCO) (section 269P(3)).
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily centred around the application and assessment process for TCOs. When an application for a TCO is received, the CEO must determine whether it meets the core criteria, as outlined in section 269C. If the CEO is satisfied that the criteria are met, they must publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made (subsection 269K(1)). Once the application is approved and the TCO is issued, the lower rate of duty specified in the TCO applies to the goods from the date the application was lodged (subsection 269S(1)). The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Any breach of the provisions outlined in the Customs Act 1901 can result in civil or criminal consequences. For instance, section 269ZC of the Act outlines offences related to false or misleading statements in an application for a TCO, which can attract criminal penalties. Additionally, section 269ZD specifies offences related to the fraudulent use of a TCO, which can also result in criminal penalties. The maximum penalties for these offences are prescribed under the Crimes Act 1914 and can include substantial fines and imprisonment, depending on the severity of the breach. Civil penalties may also apply for non-compliance with the Act, and these can include fines up to a specified maximum amount as determined by the relevant legislation.