EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619214
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 plastic extrusion welders on 29 November 2006.
Instrument
TCO No 0619214 was made on 02 March 2007. It declares that those certain plastic extrusion welders 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. 0619214 is taken to have come into force on 29 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods within Australia, among other objectives. One of the mechanisms established within the Act to facilitate trade is the creation of Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on specified goods. Tariff Concession Instrument No. 0619214, enacted in 2007, was introduced to address a specific gap in the trade regulations by providing tariff concessions on certain plastic extrusion welders. This was in response to an application by Bluescope Steel Limited, who sought a TCO to reduce the customs duty on these goods from the general rate of 5% to a duty-free rate. The instrument was made after the Chief Executive Officer of Customs determined that no substitutable goods were being produced in Australia, thereby meeting the core criteria under section 269C of the Act. This concession aims to benefit importers by potentially allowing them to claim refunds for duties paid on the specified goods since the effective date of the TCO, 29 November 2006.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCO) that can be made by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity that seeks a tariff concession for goods, provided these goods are not specified in section 269SJ of the Act, which details goods ineligible for a TCO. The Act is jurisdictional at the Commonwealth level, affecting all entities within Australia. To qualify for a TCO, the application must meet the core criteria outlined in section 269C of the Act, which requires that no substitutable goods are produced in Australia at the time the application is lodged. This concession, once granted, applies nationally and allows for a lower rate or free customs duty on the specified goods, as determined by the prescribed item in Schedule 4 to the Customs Tariff Act 1995. The Act also ensures that any rights of persons other than the Commonwealth are protected, meaning no disadvantages or new liabilities are imposed retroactively from the date the TCO is registered.
Key Provisions
The key operative sections of the Customs Act 1901 under the Tariff Concession Instrument No. 0619214 (paragraphs 269C, 269D, 269E, 269F, 269K, 269P, 269S, and 269SJ) establish a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows for an application to the CEO for a TCO on goods, provided they do not fall under the exclusions specified in section 269SJ. Section 269C stipulates that an application meets the core criteria if no substitutable goods are produced in Australia on the date the application is lodged, with 'substitutable goods' defined in section 269D and 'ordinary course of business' in section 269E. If the CEO is satisfied that the core criteria are met, section 269P(3) mandates the CEO to issue a TCO.
The Act imposes several obligations on the parties involved. Bluescope Steel Limited, as the applicant, must ensure their application adheres to the criteria set forth in sections 269C and 269F, and provide all necessary information to satisfy the CEO. The CEO, on the other hand, must review the application, determine if it meets the core criteria, and if so, issue a TCO as per section 269P(3). Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO, ensuring a level of transparency and opportunity for public input.
Failure to comply with the requirements of the Customs Act 1901 and the Tariff Concession Instrument No. 0619214 may result in various consequences. While the explanatory statement does not explicitly mention offences or penalties, breaches of the Act or the terms of a TCO could lead to civil or criminal liability. For instance, if a party is found to have provided false information in an application, they could face penalties under relevant sections of the Act. The maximum penalties for such breaches can vary widely depending on the specific offence and the severity of the breach, but they can include fines and, in some cases, imprisonment.