EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714098
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 steel coil lifting tongs on 4 September 2007.
Instrument
TCO No 0714098 was made on 9 November 2007. It declares that those certain steel coil lifting tongs 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. 0714098 is taken to have come into force on 4 September 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 was enacted by the Australian Parliament to provide a comprehensive framework for the administration of customs and excise duties, among other things. The Act established a scheme under which Tariff Concession Orders (TCOs) could be made to apply a lower rate of customs duty to certain goods, thereby facilitating trade and reducing costs for businesses. One such instrument, Tariff Concession Instrument No. 0714098, was introduced on 9 November 2007, following an application by Bluescope Steel Ltd for a TCO in respect of certain steel coil lifting tongs. The objective was to ensure that no substitutable goods were produced in Australia, thereby satisfying the core criteria under the Act. This particular TCO resulted in a reduction of the duty rate from 5% to 0% for the specified goods, effective from 4 September 2007, the date the application was lodged.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking to import goods that may qualify for tariff concessions, thereby benefiting from lower customs duties. The Act’s jurisdiction is national, as it falls under the Commonwealth. The primary scope of the Act includes the process by which applications for TCOs are evaluated, ensuring that the goods in question are not substitutable by products manufactured in Australia and are not among the specified exclusions outlined in section 269SJ. The application process involves publishing a notice in the Gazette to invite submissions from interested parties, although in the case of TCO No. 0714098, no submissions were received. The Act also provides for the commencement of TCOs on the date the application is lodged, with no retroactive effect on the rights of parties other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0714098 are sections 269C, 269F, and 269P of the Customs Act 1901, which outline the process for applying for, assessing, and granting a Tariff Concession Order (TCO). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must determine whether the application meets the core criteria under section 269C. The CEO is required to issue a written TCO if satisfied that the application meets the core criteria and no substitutable goods were produced in Australia on the application date.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO of Customs to assess TCO applications against the core criteria specified in the Act. This involves verifying that no substitutable goods were produced in Australia on the date the application was lodged, as defined by sections 269D and 269E. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application, as per subsection 269K(1). Once a TCO is granted, the Act ensures that it does not affect the rights of any person other than the Commonwealth in relation to actions taken prior to the TCO's effective date.
The Customs Act 1901 imposes penalties for non-compliance with the requirements of the Act. Subsection 269S(1) stipulates that a TCO is deemed to come into effect on the date the application was lodged. If a person fails to comply with the terms of a TCO, they may face civil or criminal penalties, depending on the nature and severity of the breach. While the Act does not specify maximum penalties, breaches of customs laws generally attract significant fines and potential imprisonment under other relevant sections of the Customs Act and associated regulations. The consequences for non-compliance can be severe, including financial penalties and legal action, emphasising the importance of adherence to the Act's provisions.