EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708686
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 valve parts on 2 July 2007.
Instrument
TCO No 0708686 was made on 7 September 2007. It declares that those certain 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. 0708686 is taken to have come into force on 2 July 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, as amended, provides a framework for the implementation of Tariff Concession Orders (TCOs) to facilitate trade by reducing customs duties on certain goods. The Tariff Concession Instrument No. 0708686 was enacted in 2007 by the Chief Executive Officer of Customs, following an application by Bluescope Steel Ltd for tariff concessions on specific valve parts. This instrument was introduced to address the gap where certain imported goods could benefit from reduced customs duties if they were not being produced domestically, thus promoting competitive market practices and economic efficiency. The policy objective, as outlined in the Act, is to ensure that the application of tariff concessions does not disadvantage any person and allows importers to claim refunds for duties paid on the specified goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0708686 under the Customs Act 1901 applies to the particular goods specified in the instrument, namely certain valve parts, which are now eligible for a concessional tariff rate. The Act allows for applications for tariff concession orders (TCOs) to be made by any person, which could include businesses, importers, or other stakeholders, provided that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. The Act applies at the Commonwealth level, with the CEO of Customs having the authority to decide on the eligibility of an application for a TCO based on the core criteria outlined in section 269C of the Act. The TCO provides a benefit in the form of a reduced customs duty rate, from the general rate of 5% down to 0%, effective from the date the application was lodged, which is 2 July 2007. The TCO does not retroactively affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth, ensuring that the rights of importers are preserved and they may apply for refunds of duties paid on imports of these goods since the effective date of the TCO. The scope of the Act extends to include the publication of notices in the Gazette and the potential for public submissions, although in this case, no submissions were received.
Key Provisions
The primary operative sections of the Customs Act 1901 in this context include sections 269C, 269F, 269P, and 269SJ (subsections 269K(1) and 269S(1)). Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application meets the core criteria specified in section 269C, and is not in respect of goods specified in section 269SJ, the CEO must make a written order under section 269P(3). This order declares that the goods in question are subject to a particular item in the Customs Tariff Act 1995 Schedule 4. The commencement date of the TCO is the date on which the application was lodged, as stipulated in subsection 269S(1). Additionally, subsection 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the making of the TCO.
The obligations imposed on parties by this Act primarily concern the CEO of Customs. The CEO is obligated to assess whether a TCO application meets the core criteria, as outlined in section 269C. This involves determining whether substitutable goods were produced in Australia on the day the application was lodged. If the application satisfies these criteria and is not in respect of prohibited goods as per section 269SJ, the CEO must issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should proceed, as per subsection 269K(1). The CEO must also ensure that the TCO does not disadvantage any person, other than the Commonwealth, and does not impose any liabilities on them in relation to actions taken before the TCO’s registration date.
The Act does not explicitly state any offences or penalties for breaches related to the issuance or non-issuance of a TCO. However, the failure to comply with the procedural requirements, such as not publishing a notice in the Gazette or not properly considering submissions, might lead to legal challenges or administrative actions. The consequences of non-compliance could include the TCO being contested in court, potentially leading to its invalidation if found to be improperly issued. Importers could also seek remedies if they are adversely affected by any procedural missteps. Despite the lack of specific penalties, adherence to the legislative requirements is critical to avoid any legal repercussions and ensure the integrity of the tariff concession process.