EXPLANATORY STATEMENT
Tariff Concession Instrument No.0410024
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 refractory taphole grouts on 24 September 2004.
Instrument
TCO No 0410024 was made on 11 March 2005. It declares that those certain refractory taphole grouts 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 3%.
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. One submission objecting to the TCO application was received from Shinagawa Refractories A/Asia Pty Ltd.
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. 0410024 is taken to have come into force on 24 September 2004.
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 Parliament of Australia, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation addresses the need to provide relief on customs duties for specific goods under certain conditions, facilitating trade by reducing the financial burden on importers. The Tariff Concession Instrument No. 0410024, issued under this Act, is a specific example of such a concession, reducing the duty on certain refractory taphole grouts from the general rate of 5% to 3%. This measure was introduced following an application by Bluescope Steel Ltd, with the intent to ensure that the goods in question could not be substituted by locally produced alternatives, thus meeting the core criteria for concession eligibility. The process also includes provisions for public consultation to allow interested parties to voice their opinions on the proposed concessions.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the process by which Tariff Concession Orders (TCOs) can be established, allowing for lower customs duty rates on specific goods. This Act applies to entities seeking tariff concessions for goods that are not produced in Australia in the ordinary course of business, and it is administered by the Chief Executive Officer of Customs (CEO). The CEO evaluates applications against core criteria, including the absence of substitutable Australian-made goods and the specific definitions of "produced in Australia" and "ordinary course of business" as outlined in the Act. The geographical reach of this legislation is national, impacting all importers and exporters within Australia. The scope of the legislation is further extended through subordinate instruments, which may provide additional guidelines or criteria for TCO applications. Notably, certain goods specified in section 269SJ of the Act are excluded from tariff concessions. For instance, TCO No. 0410024 applies to certain refractory taphole grouts, reducing their customs duty rate from 5% to 3% once the CEO determined that no equivalent goods were produced domestically. This order came into effect on the date the application was lodged, 24 September 2004, without retroactively affecting the rights of any party.
Key Provisions
The key operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), include sections 269C (subsection 269C(1)), 269B, and 269P(3). Section 269C(1) stipulates that the CEO must consider whether a TCO application meets the core criteria, which are defined in section 269B and involve the concepts of goods produced in Australia, ordinary course of business, and substitutable goods. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written TCO declaring the applicable rate of customs duty.
The Act imposes specific obligations on the CEO and applicants. The CEO must, upon receiving a valid application, publish a notice in the Gazette inviting objections or submissions from interested parties (subsection 269K(1)). This process ensures transparency and allows for public input before a decision is made. Applicants must provide sufficient information to demonstrate that the goods in question meet the criteria for a TCO, such as proving that no substitutable goods are produced in Australia.
Failure to comply with the requirements of the Customs Act 1901 can result in civil or criminal penalties. For example, knowingly providing false information in an application could lead to prosecution under the False Statements Act 1989. The penalties for such offences can include fines and imprisonment, depending on the severity of the offence. Additionally, any person who fails to comply with the terms of a TCO may face financial penalties or other civil consequences as specified in the relevant regulations.
The Tariff Concession Instrument No. 0410024, which was issued on 11 March 2005, provides a concrete example of how these provisions work in practice. Bluescope Steel Ltd applied for a TCO for certain refractory taphole grouts, and the CEO issued the order after determining that the application met the core criteria. This resulted in a reduced customs duty rate of 3% for these goods, down from the general rate of 5%. The TCO came into effect on 24 September 2004, the date the application was lodged, and importers were subsequently able to apply for refunds on duties paid before the TCO was registered.