EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705406
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 vent valves on 12 April 2007.
Instrument
TCO No 0705406 was made on 29 June 2007. It declares that those certain vent valves 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. 0705406 is taken to have come into force on 12 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 was enacted to establish a comprehensive framework for customs duties and related regulations, providing the legislative basis for the administration of customs and excise in Australia. One of the notable features of this Act is Part XVA, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism allows for a reduced rate of customs duty on specified goods, provided that certain criteria are met. The Tariff Concession Instrument No. 0705406, enacted in 2007, exemplifies this process by granting a tariff concession to Bluescope Steel Ltd for certain vent valves, reducing the duty rate from 5% to 0%. This concession was granted following an application and subsequent determination by the CEO that no substitutable goods were being produced in Australia. The primary objective of this legislation is to support Australian industries by lowering the cost of imported goods, thereby encouraging competitive market practices and economic growth.
Scope and Application
The Tariff Concession Instrument No. 0705406 under the Customs Act 1901 applies to the specific goods identified in the instrument, namely certain vent valves. This instrument is pertinent to entities involved in the import of these vent valves and aims to provide tariff concessions for these goods, thereby reducing the customs duty from the general rate of 5% to 0%. The application of this instrument is within the jurisdiction of the Commonwealth of Australia, as it falls under the purview of the Customs Act 1901 and the Customs Tariff Act 1995. The instrument extends to any party engaged in the importation of the specified vent valves, potentially benefiting businesses and importers by reducing their customs duty liabilities. Exclusions under the Act include goods that cannot be subject to a Tariff Concession Order, as specified in section 269SJ, and the instrument does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken prior to the registration date. Additionally, the instrument does not impose any liabilities on any person, thereby safeguarding the interests of importers who may be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0705406 under the Customs Act 1901 (sections 269C, 269F, 269P) establish the process for applying for and granting a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO determines that the application is valid and meets the core criteria (section 269C), they must issue a written order (section 269P). The instrument declares that the specified goods are subject to a reduced rate of customs duty, in this case, a rate of 0% for certain vent valves.
The Act imposes obligations on both the applicant and the CEO. The applicant must ensure their application is valid and not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must evaluate the application to confirm it meets the core criteria, specifically that no substitutable goods are produced in Australia (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (section 269K). In this case, the CEO did not receive any submissions.
Breaching the requirements set out in the Customs Act 1901 can lead to various consequences. If a person submits a false or misleading application for a TCO, they may face legal penalties. The Act does not specify maximum penalties for breaches related to TCOs, but general penalties for making false statements or providing misleading information under the Customs Act can include fines and imprisonment. Furthermore, any failure to comply with the terms of a TCO could result in the goods being subject to the higher rate of duty, potentially leading to financial liabilities for the importer.