EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718207
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 roll grinder caliper parts on 24 October 2007.
Instrument
TCO No 0718207 was made on 31 January 2008. It declares that those certain roll grinder caliper parts 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. 0718207 is taken to have come into force on 24 October 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 amended to introduce the Tariff Concession Instrument No. 0718207, which provides a lower rate of customs duty on certain roll grinder caliper parts, as enacted by the Chief Executive Officer of Customs under section 269F. This legislative instrument addresses the problem of ensuring that Australian industry remains competitive by providing tariff concessions for goods that cannot be produced domestically. The instrument was introduced to provide relief to Bluescope Steel Ltd, which applied for the concession on 24 October 2007, and was passed into law by the Australian Parliament. The policy objective of this instrument is to support the competitiveness of Australian industry by allowing for tariff reductions on specific goods where no substitutable goods are produced in Australia, thus enabling Bluescope Steel Ltd to import the specified parts at a reduced duty rate, thereby potentially lowering costs and improving economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0718207 under the Customs Act 1901 applies to the concession of customs duty on certain roll grinder caliper parts, specifically those applied for by Bluescope Steel Ltd. The instrument is applicable to the goods specified in the application and falls under the purview of the Customs Act 1901, which governs the regulation of customs duties and related activities in Australia. The legislation applies to the Chief Executive Officer of Customs who is responsible for determining whether to grant a Tariff Concession Order (TCO) based on the application and the criteria outlined in the Act. The instrument’s geographic reach is national, as it is an instrument made under Commonwealth legislation. There are specific exclusions provided under section 269SJ of the Act, which identifies goods that cannot be subject to a TCO. The Act allows for the extension or restriction of application through subordinate instruments, ensuring flexibility in the administration of tariff concessions.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0718207, as per sections 269C and 269P(3) of the Customs Act 1901, involve the declaration of certain roll grinder caliper parts as goods eligible for a Tariff Concession Order (TCO). This instrument, made on 31 January 2008, specifies that these parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the general rate of duty set at 5% but reduced to free under the TCO. The CEO of Customs must be satisfied that no substitutable goods are produced in Australia, as outlined in section 269C, before issuing a TCO. This instrument effectively lowers the customs duty on these specific parts, making them more affordable for importers.
The obligations imposed by the Act on the parties and entities it governs include the requirement for the CEO to assess whether an application for a TCO meets the core criteria, as defined in section 269C. This involves determining that no substitutable goods are produced in Australia on the day the application is lodged. Additionally, section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, no submissions were received. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the TCO's registration date, as stipulated in subsection 269S(1).
For breaches of the provisions of the Customs Act 1901, the Act provides for various offences and penalties. Civil and criminal penalties may apply depending on the nature and severity of the breach. While the explanatory statement does not detail specific penalties for this particular TCO, it is known that the Customs Act 1901 includes provisions for substantial fines and potential imprisonment for serious breaches. The specific penalties would depend on the exact nature of the contravention, but they are intended to ensure compliance with the Act's requirements and maintain the integrity of the customs duty system.