EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619215
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 pickle line tank hexagonal head monel bolts on 29 November 2006.
Instrument
TCO No 0619215 was made on 02 March 2007. It declares that those certain pickle line tank hexagonal head monel bolts 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 10%. 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. 0619215 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 to facilitate the administration of customs duties and to provide a framework for the regulation of imports and exports in Australia. It established a scheme under which Tariff Concession Orders (TCOs) could be made, providing lower rates of customs duty on specified goods. This legislation was introduced to address the need for a streamlined process to apply for tariff concessions on goods that are not produced domestically or for which there are no substitutable goods in Australia. The Tariff Concession Instrument No. 0619215 was enacted by the Commonwealth Parliament to provide a specific concession for certain pickle line tank hexagonal head monel bolts, allowing for a duty-free rate for these goods. The policy objective was to support Australian industries by ensuring that certain imported goods could enter the market without the burden of customs duties, thus potentially lowering costs and increasing competitiveness. The Chief Executive Officer of Customs determined that the application met the core criteria, as no substitutable goods were produced in Australia, and subsequently issued the TCO.
Scope and Application
The Tariff Concession Instrument No. 0619215, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain pickle line tank hexagonal head monel bolts, which are now subject to a lower rate of customs duty through a Tariff Concession Order (TCO). The Act allows for the Chief Executive Officer of Customs (CEO) to make TCOs to provide tariff concessions on goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative framework is designed to benefit industries by reducing the customs duty on specific goods, thereby potentially lowering the cost of imports and aiding competitive pricing in the market. The geographic reach of the Act is national, impacting all entities and individuals involved in the importation of the specified goods within Australia. The application of the TCO does not impose any liabilities on persons other than the Commonwealth and does not affect any pre-existing rights of individuals or entities. While the Act itself sets the primary criteria and process for TCOs, the detailed application and administration of these concessions may be further regulated through subordinate instruments.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0619215, under the Customs Act 1901, establish the conditions and process for the application and approval of Tariff Concession Orders (TCOs). Section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the application is not in relation to goods excluded under section 269SJ, the CEO must then determine whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must make a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties include ensuring that any application for a TCO is made in accordance with the specified criteria and procedures. The CEO of Customs is required to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed. The CEO must also ensure that any TCO does not affect the rights of persons, except the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered. Importers, however, will benefit from the TCO as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Breaches of the provisions of the Customs Act 1901 can lead to civil and criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, the Act generally provides for penalties for non-compliance with its provisions. The maximum penalties can vary depending on the specific offence, but they may include fines or imprisonment, or both. For example, knowingly making a false statement in an application for a TCO could lead to penalties under section 286 of the Act, which provides for fines and imprisonment for making false statements in connection with customs matters. The precise penalties would be determined by the courts based on the nature and severity of the breach.