EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713145
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 thrust pads on 17 August 2007.
Instrument
TCO No 0713145 was made on 19 October 2007. It declares that those certain thrust pads 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. 0713145 is taken to have come into force on 17 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, establishes a framework for the regulation of customs duties and related activities. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for lower rates of customs duty on specified goods, subject to certain criteria. The Tariff Concession Instrument No. 0713145, made on 19 October 2007, addresses a particular case where Bluescope Steel Limited applied for a TCO on certain thrust pads, resulting in a tariff concession that reduced the duty from 5% to free. The instrument was introduced to ensure that the TCO application met the core criteria, specifically that no substitutable goods were produced in Australia at the time of the application. The process involved publishing a notice in the Gazette to invite submissions, though none were received. The TCO came into effect on 17 August 2007, the date the application was lodged, and it does not disadvantage any person or impose liabilities for actions taken prior to its registration.
Scope and Application
The Tariff Concession Instrument No. 0713145, made under the Customs Act 1901, applies specifically to goods identified in an application for a Tariff Concession Order (TCO). The Act applies to any person or entity that makes an application for a TCO, provided the goods in question are not those specifically excluded under section 269SJ of the Act. The geographic reach of this Act is national, as it pertains to customs duty on goods entering Australia. The application and effectiveness of the Act extend to all jurisdictions within Australia, governed by the Commonwealth. The TCO process ensures that the application is reviewed by the Chief Executive Officer of Customs, who must determine if the goods qualify for a tariff concession based on the criteria outlined in sections 269C and 269F of the Act. Notably, the TCO does not impact the rights of any person except the Commonwealth, nor does it impose any liabilities on individuals or entities other than the Commonwealth. Additionally, the rights of importers are protected and can benefit from refunds of duty on the specified goods under the Customs Act and Regulations. The commencement of this particular TCO is dated from the day the application was lodged, which was 17 August 2007, and the concessions are applicable retroactively from that date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0713145 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer of Customs (section 269P) to make a written order, known as a Tariff Concession Order (TCO), if satisfied that the application for tariff concession meets the core criteria. Specifically, section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', which are crucial in determining eligibility for a TCO.
The obligations imposed by this Act on the parties involved, particularly Bluescope Steel Limited in this instance, include ensuring that their application for a TCO is made under the correct criteria as outlined in section 269C. The CEO of Customs is obligated to assess the application against these criteria and, if satisfied, to publish a notice in the Gazette inviting submissions from any interested parties. Following this, if no objections are raised, the CEO must proceed to make the TCO as per section 269P. The CEO, in this case, did not receive any submissions opposing the TCO for the specified thrust pads, thus facilitating the issuance of TCO No. 0713145.
Regarding offences, penalties, or consequences for breach, the Act does not specify particular penalties for failing to comply with the terms of a TCO. However, general contraventions of the Customs Act 1901 can lead to significant civil and criminal penalties. Under section 221A of the Customs Act, a person who contravenes a provision of the Act or Regulations may be liable for a penalty of up to 10,000 penalty units for a corporation and 1,000 penalty units for an individual. Additionally, section 221B outlines that a person who engages in a scheme to evade the payment of duty or tax may face imprisonment for up to 10 years. The TCO itself does not impose any liabilities on any person other than the Commonwealth, ensuring that the rights of importers are not adversely affected by its implementation.