EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707615
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 cutter heads on 22 May 2007.
Instrument
TCO No 0707615 was made on 3 August 2007. It declares that those certain cutter heads 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. 0707615 is taken to have come into force on 22 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 amended by Tariff Concession Instrument No. 0707615, enacted in 2007, to address the need for tariff concessions for specific imported goods, ensuring that Australian industries could access necessary materials without undue financial burden. This instrument was introduced by the Chief Executive Officer of Customs in accordance with section 269F of the Act, which allows for applications for Tariff Concession Orders (TCOs) for goods not specified in section 269SJ of the Act. The policy objective of this measure is to facilitate the import of goods that are not produced domestically, thus supporting the competitive edge of Australian businesses and encouraging economic efficiency.
The instrument specifically addresses the application by Bluescope Steel Ltd for a TCO concerning certain cutter heads, declaring that these goods are subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods are produced in Australia. The instrument ensures that the rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported since the effective date of the TCO, 22 May 2007, without imposing any new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, under its Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that apply lower rates of customs duty to specified goods, provided the application for such an order meets certain core criteria. This process applies to any person who applies for a TCO, ensuring that no substitutable goods are produced in Australia at the time of application. The geographic reach of this legislation is national, affecting all entities within Australia that are subject to customs regulations. The Act does not apply to goods specified in section 269SJ, which outlines exceptions to the TCO scheme. Any subordinate instruments or regulations would further define the specifics of the application and enforcement of TCOs, extending or potentially restricting their application based on additional criteria or conditions set out in those instruments. The commencement of a TCO is effective from the date of the application, and it does not disadvantage any person by affecting their rights or imposing liabilities for actions prior to the order’s registration.
Key Provisions
The Tariff Concession Instrument No. 0707615, issued under section 269F of the Customs Act 1901, allows for a reduced customs duty rate for specific goods. This instrument was applied to certain cutter heads by Bluescope Steel Ltd on 22 May 2007. The Chief Executive Officer of Customs (CEO) issued Instrument TCO No. 0707615 on 3 August 2007, declaring that these cutter heads are subject to a 0% duty rate, down from the general rate of 5%, following a determination that no substitutable goods were produced in Australia at the time of application.
The Act mandates that the CEO must ensure that any TCO application is assessed against the core criteria outlined in section 269C. Specifically, the CEO must confirm that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was submitted. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they are required under subsection 269P(3) to issue a written order, which is the Tariff Concession Order (TCO).
The CEO has obligations under the Act to consult with relevant stakeholders before making a TCO. This includes publishing a notice in the Gazette, as stipulated in subsection 269K(1), inviting any person who might have an interest in the application to submit their views. In the case of Instrument TCO No. 0707615, no submissions were received by the CEO, indicating that no objections were raised against the concession.
The Act specifies that a TCO comes into force on the day the application is lodged, which in this case was 22 May 2007. Importantly, the TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person for actions taken prior to the registration date. Importers of the affected goods will benefit from this concession, with the possibility of applying for a refund of duty paid on those goods since the TCO's effective date under paragraph 126(1)(r) of the Regulations. Failure to comply with the requirements of the TCO could result in legal consequences, although specific offences, penalties, or civil/criminal consequences are not detailed in the provided text.