EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709061
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 (AIS) Pty Ltd applied for a TCO in respect of certain DC rolling mill motor parts on 03 July 2007.
Instrument
TCO No 0709061 was made on 14 September 2007. It declares that those certain DC rolling mill motor 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 10%. The rate of duty for the goods subject to the TCO is free.
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. 0709061 is taken to have come into force on 03 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 provides for a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, effectively granting tariff concessions on certain goods. Enacted by the Commonwealth Parliament, the Customs Act 1901 aims to facilitate international trade by allowing for reduced customs duties on specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 0709061, made on 14 September 2007, exemplifies this process. This specific instrument was introduced to address a gap in tariff concessions for certain DC rolling mill motor parts, for which Bluescope Steel (AIS) Pty Ltd applied on 03 July 2007. The instrument declares that these parts are subject to a free duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from the date the application was lodged. The policy objective of such concessions is to reduce the financial burden on importers and potentially stimulate trade by making imported goods more competitively priced.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to specific goods that qualify for a lower rate of customs duty than what is typically imposed. The application for such a concession is subject to certain criteria, including the condition that no substitutable goods are produced in Australia at the time of application. This application process is available to any individual or entity seeking tariff relief for goods they import, provided those goods do not fall under the exclusions outlined in section 269SJ of the Act. The application process involves a public notification to allow for any objections, although in this instance, none were received. The TCO applies from the date of the application and benefits importers by allowing them to apply for a refund of duties paid on goods imported since the effective date of the concession. The application and issuance of TCOs are governed by the Customs Act and further detailed in the Customs Tariff Act 1995.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0709061 under the Customs Act 1901 pertain to the making of Tariff Concession Orders (TCOs). Section 269F (1) allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs, and meets the core criteria in section 269C, the CEO must issue a written order, as specified in section 269P(3). Section 269C stipulates that the core criteria are satisfied if no substitutable goods were produced in Australia on the day the application was lodged. These provisions collectively facilitate the process of applying for and granting tariff concessions on certain goods.
The obligations imposed by the Act on the parties or entities it governs are primarily directed towards the CEO and the applicants. The CEO has the obligation to evaluate applications against the core criteria, as outlined in sections 269C and 269P(3). This involves determining whether substitutable goods were produced in Australia and, if not, issuing the TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who may have reasons why the TCO should not be made. For applicants, the obligation is to ensure their applications are valid and meet the specified criteria, including not being in respect of goods listed in section 269SJ.
Regarding offences, penalties, or civil/criminal consequences for breaches, the Customs Act 1901 does not explicitly state specific penalties for failing to comply with the requirements of TCOs. However, general provisions within the Act, such as sections pertaining to false statements or fraudulent conduct in relation to customs duties, may apply. Typically, breaches of customs regulations can result in substantial fines and potential imprisonment, depending on the severity and intent behind the breach. The specific penalties are usually outlined in the Customs Act and associated regulations, but they are not detailed in this particular TCO.
The instrument, TCO No. 0709061, which was made on 14 September 2007, grants tariff concessions on certain DC rolling mill motor parts by applying item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that the general rate of duty, which would otherwise be 10%, is reduced to free for these specific goods, provided the core criteria are met. The TCO came into force on the date the application was lodged, 3 July 2007, and does not affect the rights of any person as at the date of registration, ensuring that no one is disadvantaged or imposed with liabilities for actions prior to the registration date. Importers of the affected goods can benefit from this concession by applying for a refund of duty on goods imported since the TCO came into effect.