EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704423
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 welder parts on 22 March 2007.
Instrument
TCO No 0704423 was made on 15 June 2007. It declares that those certain welder parts 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. 0704423 is taken to have come into force on 22 March 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. 0704423 was enacted in 2007 under the Customs Act 1901, aimed at addressing the issue of providing tariff concessions for specific goods, thereby reducing the customs duty imposed on these goods. This instrument was developed to streamline the process of applying for and granting tariff concessions, ensuring that such concessions are only applied when no substitutable goods are produced in Australia. The Customs Act 1901 outlines the scheme for Tariff Concession Orders (TCOs) which, when approved, lower the rate of customs duty on certain goods. The Customs Act 1901 is administered by the Parliament of Australia, and the policy objective of this instrument is to facilitate trade by reducing the duty burden on specific imported goods, thus encouraging their availability and use in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0704423 made under the Customs Act 1901 applies to the concession of tariff rates for certain goods, specifically welder parts in this instance, which are to be treated under a specified item of Schedule 4 to the Customs Tariff Act 1995. This instrument is applicable to Bluescope Steel Ltd, the entity that applied for the concession, and any other entities importing the specified goods into Australia. The concession reduces the customs duty rate from 5% to 0%, benefiting importers of these goods. The geographic reach of the Act is national, as it operates under the Commonwealth jurisdiction, affecting all importers within Australia. The Act does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken before the registration of the Tariff Concession Order. Exclusions under the Act pertain to goods specified in section 269SJ, which cannot be subject to a Tariff Concession Order. The instrument may be extended or restricted through subordinate instruments, although in this specific case, no further legislative instruments are mentioned.
Key Provisions
The main operative sections of this legislation focus on the process of applying for, making, and implementing Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is not in relation to goods that cannot be subject to a TCO (section 269SJ), the CEO must determine whether the application meets the core criteria set out in section 269C. This requires the CEO to ensure that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If the core criteria are met, the CEO must issue a TCO (section 269P(3)), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The Act imposes several obligations on the parties involved. The CEO must, upon receiving a valid TCO application, publish a notice in the Gazette inviting any interested persons to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions. Furthermore, the CEO must ensure that the TCO application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia on the application date. Once a TCO is made, it is deemed to have come into force on the date the application was lodged (subsection 269S(1)). This means that the TCO No. 0704423, made on 15 June 2007, is taken to have come into force on 22 March 2007. The TCO does not affect any rights of persons other than the Commonwealth as at the date of registration, nor does it impose any liabilities in respect of anything done or omitted before the registration date.
In terms of potential breaches and penalties, the Act does not explicitly state offences or penalties for failing to comply with the provisions related to TCOs. However, the failure to adhere to the statutory requirements for making a TCO, such as not correctly applying the core criteria, could lead to legal challenges or disputes. Although the Act does not detail specific penalties, breaches of the Customs Act 1901 in general could result in civil or criminal consequences, depending on the nature and severity of the breach. For example, knowingly making a false statement in an application could lead to criminal penalties, including fines and imprisonment, under section 255 of the Customs Act 1901. The maximum penalty for a serious breach might include fines of up to $22,000 for individuals and higher amounts for corporations, alongside potential imprisonment terms.