EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618735
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 gasholder mechanical seal parts on 22 November 2006.
Instrument
TCO No 0618735 was made on 02 March 2007. It declares that those certain gasholder mechanical seal 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. 0618735 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0618735 was enacted under the Customs Act 1901, to address the need for tariff concessions on specific goods that are not produced in Australia. This instrument was introduced to facilitate lower customs duties on imported goods for which there are no Australian-made substitutes. The Customs Act 1901, specifically Part XVA, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a reduced rate of customs duty on certain goods, provided they meet specific criteria. The policy objective is to support industries where Australian production does not exist or is not economically viable, thereby promoting the importation of goods that benefit from tariff concessions and potentially lowering costs for businesses and consumers. The instrument was published in the Gazette to allow for public submissions, although none were received in response to the notice inviting objections to the Tariff Concession Order for the gasholder mechanical seal parts.
Scope and Application
The Tariff Concession Instrument No. 0618735, made under section 269F of the Customs Act 1901, applies to Bluescope Steel Limited's application for tariff concessions on certain gasholder mechanical seal parts. This instrument is applicable to the specific goods identified in the application, which are subject to a lower rate of customs duty as declared by the Chief Executive Officer of Customs (CEO) after determining that no substitutable goods were produced in Australia in the ordinary course of business. The geographic reach of this instrument is national, as it falls under the purview of the Commonwealth of Australia. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. Importers of the specified goods, however, will be able to benefit from this concession by applying for a refund of duty on goods imported since the day the TCO is taken to have come into force. The instrument's application is further extended and restricted through subordinate instruments such as the Customs Regulations 1995, which outline the specific conditions and processes for applying for tariff concessions and refunds.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Instrument No. 0618735 under the Customs Act 1901, are sections 269F, 269C, 269B, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application is not in respect of certain prohibited goods, as outlined in section 269SJ, the CEO must then determine if the application meets the core criteria set out in sections 269C and 269B. Section 269C specifies that the application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B further defines terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the CEO is satisfied that the application meets these criteria, subsection 269P(3) requires the CEO to issue a TCO.
The Act imposes certain obligations and requirements on the parties involved. An applicant must submit a valid application for a TCO in accordance with section 269F. The CEO is obligated to review the application and ensure it does not pertain to goods specified in section 269SJ. If the application is valid, the CEO must assess whether it meets the core criteria outlined in sections 269C and 269B. Once the CEO determines that the application meets the criteria, a TCO must be issued under section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted.
There are no explicit offences or penalties mentioned in the provided text for breaching the conditions of a TCO. However, the Act does outline that the TCO does not affect the rights of a person (other than the Commonwealth) in a manner that would disadvantage them or impose liabilities for actions taken before the date of registration. The rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. This indicates that the primary consequence of not adhering to the provisions of a TCO would be the forfeiture of the benefits intended for importers who comply with the order.
In summary, the main sections of this legislation establish the framework for applying for and granting TCOs, ensuring that the application process and criteria are transparent and accessible. The obligations focus on the application process and the assessment by the CEO, ensuring that any potential objections are considered. While the text does not detail specific penalties for breaches, it clarifies that the rights of non-Commonwealth entities are protected and that the primary consequence of non-compliance would be the inability to claim the benefits of the TCO.