EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706221
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 hot blast valve parts on 1 May 2007.
Instrument
TCO No 0706221 was made on 20 July 2007. It declares that those certain hot blast 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. 0706221 is taken to have come into force on 1 May 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 the administration of customs duties and other charges. The Tariff Concession Instrument No. 0706221, introduced on 20 July 2007, addresses the gap in tariff concessions for specific goods not produced in Australia, thereby facilitating trade by reducing customs duty on imported goods. The instrument was enacted by the Commonwealth Parliament to provide a concessional tariff rate for certain hot blast valve parts, which Bluescope Steel Ltd applied for on 1 May 2007. The policy objective is to encourage the importation of goods that are not domestically produced, thus supporting industries that rely on imported components. The instrument ensures that the rights of importers are protected and that no individual is disadvantaged or subjected to additional liabilities due to the tariff concession.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0706221, pertains to the application of Tariff Concession Orders (TCO) which are issued by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which an application has been made and approved, thereby reducing the customs duty rate on those goods. This instrument specifically applies to Bluescope Steel Ltd's application for certain hot blast valve parts, granting a tariff concession that lowers the duty rate from the general 5% to 0%. The Act applies to individuals and entities seeking tariff concessions for goods not produced in Australia, provided they meet the criteria outlined in the Act, such as the absence of substitutable goods produced domestically. The CEO's decision to approve the TCO is based on the application meeting the core criteria, as stipulated in the Customs Act, and after considering any submissions received during the consultation period.
Geographically, the application and effect of this Tariff Concession Instrument are within the national jurisdiction of Australia, aligning with the provisions of the Customs Act 1901. The instrument does not impose any disadvantages or liabilities on persons other than the Commonwealth, nor does it affect rights as they stood before the date of registration. This means that the rights of importers will be positively impacted, allowing them to apply for a refund of duty on goods imported from the date the TCO is considered to have come into force. Any exclusions or exemptions are determined by the specific provisions of the Customs Act and the Customs Tariff Act 1995, which govern the eligibility of goods for tariff concessions. The Act may be further extended or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0706221 under the Customs Act 1901 (sections 269C, 269F, 269P(3), and 269SJ) provide for the establishment and application of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods. If the CEO determines that the application meets the core criteria set out in section 269C, they must issue a TCO, specifying that the goods in question are subject to a reduced rate of customs duty (section 269P(3)). A TCO cannot be applied to goods specified in section 269SJ, which lists goods that are ineligible for tariff concessions.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must assess applications for TCOs against the criteria in section 269C. If the application meets these criteria, the CEO must issue a TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who may have grounds to oppose the TCO. In the case of TCO No. 0706221, the CEO did not receive any submissions. Additionally, section 269S(1) mandates that a TCO is effective from the date the application was lodged. The TCO does not affect any rights or impose liabilities on any person in respect of actions taken before the TCO was registered.
The Act does not explicitly outline offences or penalties for breaches related to TCOs, but general provisions under the Customs Act 1901 apply. Any contravention of the Act could potentially lead to criminal charges or civil penalties. For example, providing false or misleading information in an application could result in fines or imprisonment under the Act's general penalty provisions. The specifics of such penalties would be determined based on the nature and severity of the offence, but could include substantial fines and imprisonment terms as stipulated in the general sections of the Act.