EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711673
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 Limited applied for a TCO in respect of certain cooling tower fans on 19 July 2007.
Instrument
TCO No 0711673 was made on 02 October 2007. It declares that those certain cooling tower fans 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 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. 0711673 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0711673 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific imported goods. This instrument was made by the Chief Executive Officer of Customs on 2 October 2007, following an application by Bluescope Steel Limited for tariff concessions on certain cooling tower fans. The purpose of the instrument is to provide a lower rate of customs duty on these goods, effectively reducing the duty from the general rate of 5% to free, provided that no substitutable goods are produced in Australia. This concession is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the day the tariff concession order was taken to have come into force, which is 19 July 2007. The instrument ensures that it does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the registration date.
Scope and Application
The Tariff Concession Instrument No. 0711673, made under section 269F of the Customs Act 1901, applies to the specific goods for which Bluescope Steel Limited applied on 19 July 2007. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, provided the goods do not fall under the exclusions specified in section 269SJ and meet the core criteria outlined in sections 269C, 269D, and 269E. In this case, the CEO determined that no substitutable goods were produced in Australia, thus approving the application for certain cooling tower fans. This instrument specifies that these fans will be subject to a zero rate of customs duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, down from the general rate of 5%. The instrument's application is limited to the Commonwealth and does not disadvantage or impose liabilities on any person for actions taken before its effective date, which is deemed to be 19 July 2007. The rights of importers will be positively affected, as they can apply for duty refunds for imports made since the TCO's effective date.
Key Provisions
The key operative sections of this Tariff Concession Order (TCO) are sections 269C, 269B, and 269P of the Customs Act 1901 (the Act), which establish the criteria that must be met for a TCO to be issued. Section 269C outlines that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Section 269B defines the terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', providing clarity on what is considered for the purposes of the TCO (s 269B). Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a written TCO must be issued (s 269P(3)).
The obligations and requirements imposed by this Act on the parties it governs include the obligation of the CEO to consider and assess applications for TCOs against the criteria set out in the Act. Specifically, the CEO must ensure that the application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (s 269SJ). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, and to consider any submissions received (s 269K(1)). Furthermore, the Act mandates that 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 (s 126(1)(r)).
In terms of offences, penalties, or civil/criminal consequences for breach, the Act does not explicitly outline specific penalties for failing to comply with the requirements of a TCO. However, any breach of the Customs Act 1901 could potentially result in civil or criminal penalties as provided under other sections of the Act. For example, section 245 of the Act imposes penalties for the making of false statements or the concealment of material facts in connection with an application for a TCO. The maximum penalties for such offences can include fines and imprisonment, though the specific penalties are not detailed in this particular TCO but rather in the broader Customs Act 1901.