EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705183
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 gas scrubber parts on 10 April 2007.
Instrument
TCO No 0705183 was made on 29 June 2007. It declares that those certain gas scrubber 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. 0705183 is taken to have come into force on 10 April 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, enacted by the Parliament of Australia, provides a framework for the regulation of customs duties on imported goods, including the possibility of tariff concessions. The Act was introduced to address the need for flexibility in customs duty applications to support trade and economic policies. Specifically, it allows for the application of lower customs duty rates to certain goods through Tariff Concession Orders (TCOs) when specific criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0705183 was issued on 29 June 2007, following an application by Bluescope Steel Ltd for a concession on gas scrubber parts, reflecting the policy objective of reducing the duty on these specific goods from 5% to 0%. The instrument was effective from the date the application was lodged, 10 April 2007, and did not disadvantage any person or impose new liabilities.
Scope and Application
The Customs Act 1901, under which the Tariff Concession Instrument No. 0705183 is made, applies to the concession of tariff rates for specific goods, administered by the Chief Executive Officer of Customs. The Act applies to any person or entity that seeks a tariff concession order (TCO) for goods that are not produced in Australia in the ordinary course of business and have no substitutable goods available domestically. This concession is applicable to the industry and transactions involving the importation of specified goods, as in the case of Bluescope Steel Ltd's application for certain gas scrubber parts. The geographic reach of the Act is national, given that it is a Commonwealth Act, and its application is not limited to a specific state or territory but extends across Australia. The Act provides certain exclusions, notably that goods specified in section 269SJ of the Customs Act 1901 are ineligible for a TCO. The application of the Act can be extended or restricted through subordinate instruments, as per the legislative framework, though in this instance, no such extensions or restrictions are noted. The commencement of the TCO is effective from the date the application was lodged, in this case, 10 April 2007, and it does not impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0705183, under the Customs Act 1901, revolve around the establishment of tariff concession orders (TCOs) that allow for a reduced rate of customs duty on specific goods. Section 269F (1) of the Act allows for applications to be made to the Chief Executive Officer of Customs (CEO) for such tariff concessions, provided that the goods in question are not excluded under section 269SJ. A TCO application is considered valid if the CEO is satisfied that no substitutable goods are produced in Australia, as outlined in section 269C. The CEO is then required to make a written order, as per section 269P(3), specifying the reduced duty rate applicable to the goods under item 50 of Schedule 4 to the Customs Tariff Act 1995.
Entities or individuals seeking a tariff concession must ensure that their application is complete and meets the criteria set out in the Customs Act 1901. This involves demonstrating that the goods in question are not substitutable by any goods produced in Australia, as defined in section 269D and section 269E. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the granting of the TCO. In this instance, the CEO did not receive any submissions against the application from Bluescope Steel Ltd for the gas scrubber parts. Once a TCO is issued, the concession applies retroactively to the date the application was lodged, in this case 10 April 2007, without affecting any pre-existing rights or imposing new liabilities.
In the event of non-compliance with the terms and conditions of a TCO, there may be legal repercussions. The Customs Act 1901 and associated regulations could impose penalties for breaches. For instance, under the Customs Act, incorrect claims for tariff concessions or misrepresentation of facts in an application could lead to civil or criminal penalties. While the specific penalties are not detailed in the explanatory statement, they may include fines or imprisonment, depending on the severity and intent behind the breach. Importers must also ensure they are aware of their rights and obligations under the TCO, including the ability to apply for a refund of duty on goods imported since the effective date of the concession.
The Tariff Concession Instrument No. 0705183 and its associated legislative framework underscore the importance of adhering to the specified processes and requirements for tariff concessions. Parties involved must be diligent in their applications and aware of the potential consequences of non-compliance. The Act and its regulations ensure that the tariff concession process is transparent, fair, and effectively managed, ultimately benefiting eligible importers by reducing their customs duty obligations on specified goods.