EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701722
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 filter membranes on 1 February 2007.
Instrument
TCO No 0701722 was made on 30 April 2007. It declares that those certain filter membranes 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 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. 0701722 is taken to have come into force on 1 February 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 Customs Act 1901 was amended to introduce a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This was to address the gap in tariff concessions for certain imported goods, ensuring they benefit from a lower rate of customs duty if they are not substitutable by goods produced in Australia. Enacted by the Australian Parliament, the Act aims to provide relief and competitive advantage to importers of specific goods by potentially reducing their duty burden. The process involves an application to the CEO, followed by a decision based on the core criteria set out in the Act, ensuring no substitutable goods are produced domestically. This legislative framework supports economic policy objectives by potentially enhancing trade efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0701722, made under the Customs Act 1901, applies to the concession of customs duty on certain filter membranes, specifically those applied for by Bluescope Steel Ltd. The Act allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs, which can reduce the duty on goods if certain criteria are met, such as the absence of substitutable goods being produced in Australia. The TCO applies to the filter membranes as specified in the instrument, and the legislation is applicable to any person or entity importing these goods into Australia, thereby directly affecting their customs duty obligations. The scope of the Act is national, as it operates under the Commonwealth jurisdiction, and its application is limited to the specific goods outlined in the TCO. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. Additionally, the application of the TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth for actions taken prior to the TCO's effective date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0701722 (the Instrument) are primarily derived from the Customs Act 1901 (the Act). Section 269C sets out the core criteria that a Tariff Concession Order (TCO) application must meet, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if these core criteria are satisfied, the Chief Executive Officer (CEO) of Customs must make a written order (a TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. In this case, the Instrument declares that certain filter membranes are subject to a 0% duty rate, down from the general rate of 10%.
The Instrument imposes several obligations and requirements on the parties it governs. Firstly, any person wishing to apply for a TCO must ensure that their application complies with the criteria outlined in section 269C of the Act. The CEO is obligated to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1) of the Act. The CEO must also consider these submissions and make a decision based on the information provided. Additionally, the CEO must ensure that the TCO does not disadvantage any person (other than the Commonwealth) or impose liabilities for actions taken before the date of registration, as per subsection 269S(1) of the Act.
Section 269M of the Act outlines the potential consequences for non-compliance with the Instrument. While specific offences and penalties are not detailed within the explanatory statement, the general provisions of the Customs Act 1901 apply. These could include civil or criminal penalties for knowingly providing false or misleading information in an application for a TCO. The penalties could potentially include fines or imprisonment, depending on the severity of the breach. Moreover, failure to comply with the terms of the TCO itself could result in the imposition of the full customs duty rate on the affected goods, negating the intended benefits of the concession.