EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701554
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 rolling mill AC synchronous motors on 24 January 2007.
Instrument
TCO No 0701554 was made on 13 April 2007. It declares that those certain rolling mill AC synchronous motors 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. 0701554 is taken to have come into force on 24 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. 0701554 was enacted in 2007 under the Customs Act 1901, to provide a tariff concession for certain rolling mill AC synchronous motors. This legislative instrument was introduced to address the need for a lower rate of customs duty on specified goods, as part of the broader scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The problem it aimed to address was the potential economic disadvantage faced by businesses seeking to import these specific goods into Australia, where no suitable domestic alternatives were produced. The Tariff Concession Instrument was enacted by the relevant legislature, specifically the Commonwealth Parliament, to ensure that the policy objectives of facilitating trade and supporting Australian industries were met effectively. The underlying policy objective of this instrument was to enable the importation of these goods at a tariff rate that would not unduly burden the importer, thereby promoting fair trade practices and supporting the competitive position of Australian industries.
Scope and Application
The Tariff Concession Instrument No. 0701554, made under the Customs Act 1901, applies to goods specified in the instrument, in this case certain rolling mill AC synchronous motors, and is intended to provide tariff concessions to the applicant, Bluescope Steel Limited. The application of the instrument is contingent upon the Chief Executive Officer of Customs being satisfied that the application meets the core criteria set out in section 269C of the Act, specifically that no substitutable goods were produced in Australia at the time the application was lodged. This instrument is part of a broader scheme under Part XVA of the Customs Act 1901 that allows for the application of lower rates of customs duty to certain goods via Tariff Concession Orders (TCOs). The geographic reach of this legislation is nationwide, as the Customs Act 1901 is a Commonwealth Act. Any person, including Bluescope Steel Limited, may apply for a TCO in respect of goods, provided the application does not relate to goods specified in section 269SJ of the Act. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The rights of importers are beneficially affected by this TCO, as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0701554 under the Customs Act 1901 (section 269F) require that an application be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO is satisfied that the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO, the CEO must then determine whether the application meets the core criteria. Section 269C stipulates that a TCO application meets these criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Furthermore, section 269P(3) mandates that if the CEO finds the application meets the criteria, a TCO must be issued, declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. This particular TCO No. 0701554, issued on 13 April 2007, applies to certain rolling mill AC synchronous motors, declaring them subject to item 50 of the Tariff with a duty rate of free, down from the general rate of 5%.
The obligations and requirements imposed by this Act on the parties or entities it governs include the necessity for a valid application to be submitted to the CEO for a TCO, ensuring that the goods in question do not fall under the ineligible category outlined in section 269SJ. Additionally, the CEO must satisfy the core criteria set out in section 269C before issuing a TCO. The Act also requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested party to submit a response if they believe the TCO should not be made. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it allows for the rights of importers to be beneficially affected, enabling them to apply for a refund of duty on goods imported since the effective date of the TCO.
Under the Customs Act 1901, breaches of the requirements and obligations set forth in the Tariff Concession Instrument No. 0701554 can lead to civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, it is understood that non-compliance with the provisions of the Customs Act can lead to penalties under the Act, which can include fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act and related regulations. The Act ensures that the process for issuing TCOs is transparent and fair, protecting the interests of both the government and the businesses affected by tariff concessions.