EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619606
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 heat exchanger back flushing water filters on 11 December 2006.
Instrument
TCO No 0619606 was made on 09 March 2007. It declares that those certain heat exchanger back flushing water filters 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. 0619606 is taken to have come into force on 11 December 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 Australian Parliament, was introduced to manage the importation of goods into Australia, including the imposition of customs duties. This Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs to reduce customs duty rates on specified goods. This process was designed to address economic and trade policy objectives by facilitating the importation of goods that are not produced in Australia and thereby supporting market competition and consumer choice. The Tariff Concession Instrument No. 0619606, issued on 9 March 2007, exemplifies the application of this scheme, providing duty-free treatment for certain heat exchanger back flushing water filters as of 11 December 2006, the date the application was lodged. This instrument was created following a determination by the CEO that no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria set out in the Act.
Scope and Application
The Tariff Concession Instrument No. 0619606 is an instrument under Part XVA of the Customs Act 1901 that applies to goods for which a Tariff Concession Order (TCO) has been granted by the Chief Executive Officer of Customs (CEO). This legislation is designed to facilitate a lower rate of customs duty on certain goods, provided they meet the specified criteria. The application of the Act is specifically targeted at entities or individuals who wish to import goods that are eligible for tariff concessions, and it applies to those goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods are available domestically. The geographic reach of this legislation is national, as it is administered under the Commonwealth of Australia. The Act explicitly excludes certain goods from being eligible for tariff concessions, as outlined in section 269SJ. Furthermore, the Act allows for the extension of its application through subordinate instruments, which may include regulations or further orders by the CEO. The Explanatory Statement indicates that this particular TCO affects Bluescope Steel Limited’s application for certain heat exchanger back flushing water filters, effectively reducing the duty rate to zero for these goods, which otherwise have a general duty rate of 5%.
Key Provisions
The Customs Act 1901, under its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). Section 269C sets out the core criteria that an application for a TCO must meet. Specifically, an application is valid if the goods in question are not substitutable by goods produced in Australia in the ordinary course of business (section 269C and 269D). The definitions of "ordinary course of business" and "substitutable goods" are provided in sections 269E and 269D, respectively. If the CEO is satisfied that the application meets these core criteria, they are required to issue a written TCO (section 269P(3)), which declares the goods to which a specific item in Schedule 4 of the Customs Tariff Act 1995 applies, effectively reducing the duty on these goods.
The obligations imposed by the Act on the parties involved are centred around the application process. For the applicant, such as Bluescope Steel Limited in this case, the requirement is to submit a valid application that satisfies the core criteria set out in the Act (section 269C). The CEO, on the other hand, must ensure that any TCO application that does not pertain to goods specified in section 269SJ of the Act is assessed against these core criteria. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the making of a TCO (subsection 269K(1)). In the case of TCO No. 0619606, no submissions were received, leading to the issuance of the order.
Failing to comply with the provisions of the Customs Act 1901 in relation to TCOs may result in legal consequences. While the explanatory statement does not explicitly detail offences or penalties for breaches, it is reasonable to infer that any non-compliance with the Act’s requirements could potentially lead to legal action. For instance, if an entity incorrectly claims that no substitutable goods are produced in Australia, and this is found to be false, it could face penalties under the relevant sections of the Act or other applicable laws. The specific penalties would depend on the nature and severity of the breach, but they could include fines or other administrative sanctions.
The commencement date for TCO No. 0619606, as per subsection 269S(1), is 11 December 2006, the date on which the application was lodged. This date sets the effective period for the tariff concession, meaning that any importation of the specified goods after this date will benefit from the reduced duty rate. Importantly, the TCO does not retroactively affect any rights or impose liabilities for actions taken before its registration date. Instead, it prospectively benefits importers by allowing them to apply for duty refunds for goods imported since the effective date (paragraph 126(1)(r) of the Regulations). The explanatory statement clarifies that the TCO does not disadvantage any person or impose liabilities on anyone for actions prior to the registration date.