EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712570
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 gas burner repair kits on 9 August 2007.
Instrument
TCO No 0712570 was made on 19 October 2007. It declares that those certain gas burner repair kits 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. 0712570 is taken to have come into force on 9 August 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, enacted by the Australian Parliament, established a framework for managing customs duties and tariffs on imported goods. One of the key mechanisms within this framework is the provision for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain goods. The Tariff Concession Instrument No. 0712570 was introduced to provide a specific tariff concession for certain gas burner repair kits, addressing the gap where these goods were subject to a general duty rate that potentially hindered their affordability and accessibility in the Australian market. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, fulfilling the core criteria under section 269C of the Act. The objective was to ensure that the application of a lower rate of duty would benefit importers by potentially lowering costs and enhancing the competitiveness of these goods in the domestic market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This act applies to any person who may apply for a TCO in respect of goods, provided these goods do not fall under the categories specified in section 269SJ of the Act which are ineligible for tariff concessions. The application process requires the CEO to assess if the goods in question are eligible by verifying that no substitutable goods are produced in Australia and meet the criteria outlined in section 269C of the Act. Geographically, the Act applies nationally across Australia, and its provisions extend to all goods subject to the Customs Act. Notably, the Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person by affecting their rights as at the date of registration. The application of TCOs can be further extended or clarified through subordinate instruments. In the specific case of TCO No. 0712570, the CEO granted a concession on certain gas burner repair kits, reducing the duty rate from 5% to 0%, effective from 9 August 2007, following Bluescope Steel Ltd's application.
Key Provisions
The Customs Act 1901 provides a framework for the imposition of tariffs on imported goods, with section 269F allowing for the application of Tariff Concession Orders (TCOs) for reduced duty rates. When an applicant, such as Bluescope Steel Ltd, applies for a TCO in respect of certain goods, the Chief Executive Officer of Customs (CEO) assesses the application against the core criteria outlined in section 269C, which includes verifying that no substitutable goods are produced in Australia at the time of the application. If the CEO determines that the application meets these criteria, they are mandated to issue a written order, as per section 269P(3), effectively granting the tariff concession for the specified goods.
This legislation imposes specific obligations on both the applicant and the CEO. For the applicant, the primary obligation is to submit a valid application that satisfies the core criteria, ensuring the goods in question are not substitutable by any Australian-produced goods. The CEO, on the other hand, is required to publish a notice in the Gazette, inviting submissions from interested parties if the application is accepted as valid, as stipulated in subsection 269K(1). Furthermore, the CEO must ensure that the TCO is issued promptly once the application meets the necessary criteria.
Failure to comply with the provisions of the Customs Act 1901 can result in significant consequences. Although the explanatory statement does not detail specific offences or penalties, the general framework of the Act provides for both civil and criminal penalties for breaches. Civil penalties may include fines, while criminal penalties could encompass imprisonment, depending on the severity of the breach. These penalties serve as deterrents to ensure adherence to the tariff concession process and the integrity of the customs duty system.
In the specific case of TCO No. 0712570, the CEO was satisfied that the application from Bluescope Steel Ltd for gas burner repair kits met the core criteria, leading to the issuance of a TCO that reduced the duty rate from 5% to 0%. The TCO came into effect on the date of the application, 9 August 2007, and it does not retroactively affect any rights or impose any liabilities on persons other than the Commonwealth. Importers of the affected goods can apply for a refund of duties paid since the effective date of the TCO, providing a financial benefit to those who imported the goods after the concession took effect.