EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700801
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 Ltd applied for a TCO in respect of certain lifting plugs on 18 January 2007.
Instrument
TCO No 0700801 was made on 10 April 2007. It declares that those certain lifting plugs 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 0%.
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. 0700801 is taken to have come into force on 18 January 2007.
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. 0700801, enacted in 2007, is a measure under the Customs Act 1901, designed to address the specific needs of industries by providing tariff concessions for certain imported goods. This instrument allows for a reduction in customs duty for particular goods, subject to certain conditions, and was introduced to foster economic benefits by making imported goods more competitive with locally produced alternatives. The instrument was enacted by the Parliament of Australia with the policy objective of facilitating smoother trade and encouraging the efficient use of resources within the Australian economy.
This instrument was enacted in response to an application by Bluescope Steel Ltd for tariff concessions on certain lifting plugs, which were subsequently granted as no substitutable goods were being produced in Australia. The application process involved public consultation, with no objections raised, and the concession came into effect on the date of application. This instrument ensures that while the rights of the Commonwealth are protected, the rights of importers are beneficially affected, potentially allowing for duty refunds on goods imported since the commencement of the concession.
Scope and Application
The Tariff Concession Instrument No. 0700801, under the Customs Act 1901, applies specifically to goods for which a Tariff Concession Order (TCO) has been granted. In this instance, the legislation pertains to certain lifting plugs that Bluescope Steel Ltd applied for, seeking a reduction in the duty rate from 5% to 0%. The Act applies to any entity or individual who imports or intends to import the specified goods into Australia, provided the application meets the core criteria outlined in the Act. The scope of the legislation is limited to the geographic jurisdiction of Australia, with the application of the concession being effective from the date the application was lodged. The CEO of Customs is responsible for determining whether the application meets the criteria and subsequently issuing the TCO if satisfied. The legislation does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. Any further details or extensions of the application of this Act are managed through subordinate instruments, which can provide additional specifications or exceptions as necessary.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0700801, revolve around the process and criteria for establishing Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C, 269F, 269P). A TCO allows for a lower rate of customs duty on certain goods, provided the application meets the core criteria set out in the Act, namely, that no substitutable goods are produced in Australia at the time the application is lodged (section 269C). The CEO must then make a written order, known as a TCO, specifying that the goods in question are subject to a prescribed tariff item in the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed on the parties by this Act are primarily procedural. The CEO must ensure that applications for TCOs are processed in accordance with the statutory criteria. This includes accepting valid applications, publishing notices in the Gazette to invite submissions from interested parties, and making a decision on whether to issue a TCO based on the received submissions (subsection 269K(1)). Additionally, Bluescope Steel Ltd, as the applicant in this case, must provide all necessary information and evidence to support their application for a TCO, ensuring it meets the core criteria specified in the Act.
Failure to comply with the requirements of the Customs Act 1901 can lead to several consequences. If the CEO does not adhere to the statutory obligations, such as failing to publish notices in the Gazette or not properly considering submissions, this may result in legal challenges or administrative reviews. For applicants like Bluescope Steel Ltd, failure to meet the core criteria for a TCO could mean that their application is not processed, and they remain subject to the higher rate of customs duty. Furthermore, if the CEO issues a TCO without meeting the statutory requirements, this could lead to potential revocation or legal challenges, impacting the validity of the TCO. The Act does not specify particular penalties for these breaches but suggests that any legal or administrative consequences would stem from the failure to comply with the outlined procedures.