EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803433
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 Pty Ltd applied for a TCO in respect of certain tangential finned cooling tubes on 03 March 2008.
Instrument
TCO No 0803433 was made on 23 May 2008. It declares that those certain tangential finned cooling tubes 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. 0803433 is taken to have come into force on 03 March 2008.
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. 0803433 was enacted in 2008 under the Customs Act 1901, aiming to address the issue of providing tariff concessions on certain imported goods. The Customs Act 1901 outlines a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which allow for a reduced rate of customs duty on specific goods. Bluescope Steel Pty Ltd applied for a TCO in respect of certain tangential finned cooling tubes, and the instrument was issued on 23 May 2008, effective from 3 March 2008, when the application was lodged. The tariff rate for these tubes was reduced from 5% to free, provided no substitutable goods were produced in Australia. The instrument ensures that no existing rights of persons other than the Commonwealth are adversely affected and allows importers to apply for a refund of duties paid prior to the instrument's effective date.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. This legislation applies to entities or individuals who seek a reduction in customs duty on specific goods, provided these goods are not listed in section 269SJ of the Act, which excludes certain items from TCO eligibility. The TCO mechanism operates on a national level within Australia and its territories, impacting the importation and subsequent duty rates of qualifying goods. The Act requires the CEO to assess applications based on core criteria, notably whether substitutable goods are produced in Australia, as per sections 269C and 269D. Once a TCO is issued, it effectively grants duty-free status to the specified goods, as demonstrated in the case of TCO No. 0803433 concerning tangential finned cooling tubes, which transitioned from a 5% duty rate to duty-free status. The Act mandates public consultation on TCO applications, although in this instance, no objections were received. The TCO’s commencement date aligns with the application date, ensuring that rights and liabilities are protected for all parties except the Commonwealth.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0803433, which relates to the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs). According to section 269F, any person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C specifies that a TCO application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO is required, under section 269P(3), to make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a reduced or free customs duty rate to those goods. In this specific case, TCO No. 0803433 was issued for certain tangential finned cooling tubes, declaring them subject to item 50 of Schedule 4, with the duty rate set at free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO, upon receiving a valid TCO application, must ensure that the core criteria are met, as outlined in section 269C. If these criteria are satisfied, the CEO must proceed to make the TCO, as mandated by section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be granted. This process ensures transparency and allows for public input before the TCO is finalised. Furthermore, section 269S(1) stipulates that the TCO is considered to have come into force on the date the application was lodged.
There are no specific offences, penalties, or consequences outlined in the text for breaches related to the TCO process itself. However, general compliance with the Customs Act 1901 and its regulations would still apply. Any failure to comply with the Act's provisions, including fraudulent claims or misrepresentations in the application process, could result in civil or criminal penalties as stipulated elsewhere in the Customs Act. Such penalties could include fines and imprisonment, depending on the severity of the breach. It is essential for applicants and the CEO to adhere to the legislative requirements to avoid any adverse consequences.