EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718560
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 (AIS) Pty Ltd applied for a TCO in respect of certain five circuit gear pump on 30 October 2007.
Instrument
TCO No 0718560 was made on 30 January 2008. It declares that those certain five circuit gear pumps 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. 0718560 is taken to have come into force on 30 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, enacted by the Commonwealth Parliament, facilitates the application of tariff concession orders (TCO) to lower the customs duty on certain goods, subject to specific criteria. This legislative framework was established to address the need for tariff adjustments to support economic activities and industry needs, ensuring that Australian businesses can access necessary goods at reduced costs where no substitutable products are produced domestically. The process involves an application to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria outlined in the Act. Upon approval, a TCO is issued, which applies a lower rate of duty on the specified goods, as illustrated in TCO No. 0718560, which was enacted to provide a zero-duty rate on certain five circuit gear pumps from 30 October 2007. The policy objective is to promote fair trade practices and support Australian industries by ensuring access to competitively priced imported goods where appropriate.
Scope and Application
The Tariff Concession Instrument No. 0718560 under the Customs Act 1901 applies to Bluescope Steel (AIS) Pty Ltd, specifically concerning certain five circuit gear pumps. The Act governs the process by which the Chief Executive Officer of Customs can issue a Tariff Concession Order (TCO), which allows for a lower rate of customs duty on specified goods. This legislation is applicable nationally within the Commonwealth of Australia and is targeted at entities or individuals seeking tariff concessions for specific goods that are not produced in Australia and for which no substitutable goods are produced domestically. The Act provides a mechanism for these applicants to request a TCO if the goods in question do not fall under the restricted list specified in section 269SJ of the Act. The process requires that the CEO must ensure the application meets the core criteria outlined in section 269C, which involves confirming that no substitutable goods are produced in Australia on the day the application was lodged. The TCO No. 0718560, which became effective on 30 October 2007, declares that the certain five circuit gear pumps are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, instead of the general rate of 5%. The Act also mandates consultation with the public by publishing notices in the Gazette, inviting submissions, although in this case, no submissions were received. The TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose liabilities on any person, thereby ensuring that only the rights of importers are beneficially affected.
Key Provisions
The main operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO, which can lead to a lower rate of customs duty for specified goods. The CEO, under section 269P(3), must consider whether the application meets the core criteria set out in section 269C. If satisfied, the CEO is required to issue a written TCO. The TCO is deemed to have come into force on the day the application was lodged, as per section 269S(1).
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must carefully assess TCO applications to ensure they meet the core criteria. This involves determining whether no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the application is valid, the CEO must issue a TCO and publish a notice in the Gazette inviting any objections from interested parties. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can lead to various civil and criminal consequences. While the explanatory statement does not specify maximum penalties for breaches, it is clear that any non-compliance with the Act's requirements could result in legal action. For instance, if the CEO fails to properly assess an application or issue a TCO when required, they may face legal challenges or penalties. Similarly, if an entity improperly claims tariff concessions without meeting the Act's criteria, they could face financial penalties, legal action, or both. The exact penalties would depend on the specific nature and severity of the breach.