EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719993
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 thermoplastic welding rod spools on 23 November 2007.
Instrument
TCO No 0719993 was made on 01 February 2008. It declares that those certain thermoplastic welding rod spools 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. 0719993 is taken to have come into force on 23 November 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 Tariff Concession Instrument No. 0719993, enacted in 2008, amends the Customs Act 1901 to provide tariff concessions on certain thermoplastic welding rod spools. This instrument addresses the need for tariff reductions on specific goods where no suitable Australian-produced substitutes exist, facilitating more competitive import prices and potentially encouraging local production in the future. Enacted by the Chief Executive Officer of Customs in accordance with the legislative provisions of the Customs Act 1901, the instrument aims to provide economic benefits to importers by reducing the duty on these goods from 5% to free. The policy objective is to ensure that Australian businesses and consumers have access to competitively priced goods while also fostering an environment where local production might be stimulated over time.
Scope and Application
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) through Part XVA, allowing the Chief Executive Officer of Customs to grant tariff concessions on certain goods. The application process involves an applicant, such as Bluescope Steel (AIS) Pty Ltd, submitting a request for a TCO on specific goods, in this case, thermoplastic welding rod spools. The CEO evaluates the application based on criteria including whether substitutable goods are produced in Australia, and if the application meets these core criteria, a TCO is issued, granting a lower rate of customs duty on the specified goods. In the case of TCO No. 0719993, the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria and resulting in the goods being subject to a duty rate of free instead of the general rate of 5%. This TCO came into effect on the date of the application, 23 November 2007, and does not retroactively affect any transactions or impose liabilities on individuals other than the Commonwealth. Importers of the specified goods can apply for a refund of duty paid on imports since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0719993 under the Customs Act 1901 (sections 269C, 269F, 269P(3), and 269K(1)) provide a framework for the creation of Tariff Concession Orders (TCOs). Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. Section 269C sets forth the core criteria that must be satisfied for an application to be considered, primarily focusing on whether substitutable goods are produced in Australia. Section 269P(3) mandates that if the CEO determines an application meets the core criteria, they must issue a written TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted.
The obligations and requirements imposed by this Act on the parties involved are primarily directed towards the CEO. The CEO must ensure that any application for a TCO is valid and meets the core criteria as outlined in the Act. If the CEO is satisfied that no substitutable goods are produced in Australia, they must proceed to issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette after accepting a TCO application as valid, allowing interested parties to lodge any objections. In the case of TCO No. 0719993, the CEO was required to assess the application from Bluescope Steel (AIS) Pty Ltd, determine whether it met the core criteria, and issue the TCO if satisfied, as well as publish the notice in the Gazette.
Under this legislation, any breaches or non-compliance with the provisions could potentially lead to legal consequences. While the explanatory statement does not explicitly detail specific offences, penalties, or consequences, it is reasonable to infer that failure to comply with the Act's requirements could result in civil or criminal liability. For instance, if the CEO fails to properly assess an application or issue a TCO where warranted, this could be challenged in court, potentially leading to fines or other sanctions. Similarly, if an applicant provides false information in their application, this could constitute an offence under Australian law, leading to criminal penalties, including fines and imprisonment. The maximum penalties for such breaches would depend on the specific laws applicable at the time of the offence.