EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705109
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 isolation gate valve parts on 29 March 2007.
Instrument
TCO No 0705109 was made on 15 June 2007. It declares that those certain isolation gate valve 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. 0705109 is taken to have come into force on 29 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. 0705109, enacted in 2007, addresses the issue of providing tariff concessions for specific goods under the Customs Act 1901. The Customs Act 1901 facilitates the application for tariff concession orders (TCOs) by the Chief Executive Officer of Customs, which allow for reduced customs duty rates on specified goods. This legislative instrument was introduced to provide clarity and procedural guidance on the application and granting of tariff concessions, ensuring that the process is transparent and accessible for applicants like Bluescope Steel Ltd. The policy objective, as outlined in the explanatory statement, is to ensure that the concession of tariffs is granted appropriately, taking into account the availability of substitutable goods produced in Australia. The instrument was made under the authority of the Customs Act 1901 by the relevant executive body, ensuring that the concession aligns with the legislative intent and does not disadvantage any person or impose liabilities on them.
Scope and Application
The Tariff Concession Instrument No. 0705109, made under the Customs Act 1901, applies to specific goods, in this instance certain isolation gate valve parts, and provides for a concession on the customs duty that would ordinarily apply to those goods. The Act is applicable to entities or individuals who are involved in the importation of these goods into Australia. The scope of the Act is federal, falling under the jurisdiction of the Commonwealth, and it applies to transactions involving the importation of specified goods into Australia. The Act excludes certain goods from being eligible for tariff concessions, as outlined in section 269SJ of the Customs Act 1901. The Act can be further refined or expanded through subordinate instruments, which can specify additional details or criteria for the application of tariff concessions. The Tariff Concession Order (TCO) in question came into effect on the date the application was lodged, which was 29 March 2007, and it does not affect the rights of any person other than the Commonwealth in respect of anything done before the date of registration.
Key Provisions
The main operative sections of the Customs Act 1901, specifically within Part XVA, pertain to the creation and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, and 269SJ). These sections lay out the conditions under which a TCO can be applied for, evaluated, and granted by the Chief Executive Officer of Customs (CEO). For instance, section 269F allows for applications to be submitted to the CEO, while section 269C outlines the core criteria that must be met for a TCO to be approved. Once an application meets these criteria and no substitutable goods are produced in Australia, the CEO is required to make a TCO, as stipulated in section 269P(3). This order effectively declares that the goods in question are subject to a reduced or zero rate of customs duty as per the specified item in the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. For example, any person seeking a TCO must submit a valid application to the CEO (section 269F). The CEO, upon receiving such an application, must determine if it complies with the core criteria set out in section 269C. This involves assessing whether no substitutable goods are being produced in Australia at the time the application is made. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might object to the TCO being granted (subsection 269K(1)). The CEO must consider any submissions received before making a final decision on the TCO.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can result in various consequences. While specific offences and penalties are not detailed within the explanatory statement, it is clear that any breach of the conditions or requirements could potentially lead to legal ramifications. For instance, if a TCO is granted inappropriately, the CEO may face scrutiny or legal action for not adhering to the established criteria. Additionally, any party found to have acted in a manner that circumvents the provisions of the Act, such as by producing substitutable goods in Australia after a TCO has been granted, could face civil or criminal penalties. However, the exact nature and extent of these penalties are not specified in the explanatory statement.