EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713176
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 roller element bearings on 17 August 2007.
Instrument
TCO No 0713176 was made on 19 October 2007. It declares that those certain roller element bearings 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. 0713176 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 administering customs duties and tariffs in Australia. The Act facilitates the application of lower customs duty rates through Tariff Concession Orders (TCOs) for specific goods, provided they meet certain criteria. One such concession was made with the Tariff Concession Instrument No. 0713176 on 19 October 2007, which granted a tariff concession for certain roller element bearings. This concession was introduced to address the gap in tariff rates for goods that are not substitutable by Australian-produced goods. The policy objective behind this concession is to ensure that Australian industries do not face undue competition from domestically produced substitutes, thereby encouraging the importation of goods that are not manufactured locally.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the procedure for Tariff Concession Orders (TCO) and applies to any person or entity that wishes to apply for a TCO in respect of goods that are subject to customs duty. The Act applies nationally across Australia and involves the Chief Executive Officer of Customs (CEO) who evaluates applications for TCOs to determine if they meet the core criteria. The primary criterion for approval is that no substitutable goods were produced in Australia at the time of application, as outlined in sections 269C and 269D of the Act. TCO No. 0713176, issued on 19 October 2007, pertains to certain roller element bearings for which Bluescope Steel Limited applied on 17 August 2007, and it came into force on the same application date. The TCO exempts these specific goods from the usual 5% customs duty, setting it at free. The Act also mandates the CEO to publish notices in the Gazette, inviting public submissions, although no submissions were received for this TCO. Importantly, the TCO does not retroactively disadvantage any person or impose new liabilities, and it does not affect pre-existing rights, except to beneficially allow importers to apply for duty refunds for imports made since the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0713176, under the Customs Act 1901, primarily focus on the establishment of a Tariff Concession Order (TCO) for specific goods, in this case, certain roller element bearings. Section 269C (1) of the Act mandates that the Chief Executive Officer of Customs (CEO) must make a TCO if no substitutable goods were produced in Australia on the day the application was lodged. The CEO, having reviewed Bluescope Steel Limited's application on 17 August 2007, determined that the criteria for a TCO were met, leading to the issuance of TCO No. 0713176 on 19 October 2007. This order effectively applies item 50 of Schedule 4 to the Customs Tariff Act 1995, setting the duty on these specific roller element bearings to free, down from the general rate of 5%.
The obligations and requirements imposed by the Act on the parties involved, particularly the CEO and Bluescope Steel Limited, are quite straightforward. The CEO must ensure that the application for a TCO aligns with the stipulations of section 269C, which involves verifying that no substitutable goods were being produced in Australia on the application date. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In this instance, no submissions were received. For Bluescope Steel Limited, the obligation lies in providing sufficient evidence to substantiate their claim that no substitutable goods were produced in Australia on the application date.
In terms of consequences for breach, the Customs Act 1901 does not specify explicit offences, penalties, or consequences for failing to comply with the provisions of a TCO. However, the integrity of the application process and the accuracy of the information provided are crucial. Any misrepresentation or failure to adhere to the statutory requirements could potentially lead to the invalidation of the TCO, resulting in the reversion to the original duty rates. Furthermore, while the Act does not detail specific penalties, any actions taken by the CEO that are found to be in violation of the legislative framework could be subject to judicial review or other legal remedies. The broader implications of non-compliance could also include reputational damage and loss of credibility for the applicant company.