EXPLANATORY STATEMENT
Tariff Concession Instrument No.0411190
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 gunning mixes on 27 October 2004.
Instrument
TCO No 0411190 was made on 11 March 2005. It declares that those certain refractory gunning mixes 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. 0411190 is taken to have come into force on 27 October 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 Australian Parliament, provides a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). The Act was updated to include the scheme under which TCOs can be made by the Chief Executive Officer of Customs (CEO), allowing for lower rates of customs duty on certain goods. The explanatory statement for Tariff Concession Instrument No. 0411190, issued on 11 March 2005, indicates that the instrument was introduced to address the application by Bluescope Steel Ltd for a TCO concerning specific refractory gunning mixes. The policy objective is to facilitate trade by reducing customs duties on goods for which there are no substitutable Australian-produced alternatives, thereby encouraging the import of these goods and potentially benefiting importers by reducing their duty liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allows for a lower rate of customs duty on specified goods. This Act applies to any person who may apply for such a concession in respect of goods, provided the goods are not listed in section 269SJ of the Act, which outlines those goods ineligible for TCOs. The application process mandates that the CEO assesses whether the goods in question are substitutable by Australian-produced goods in the ordinary course of business, as defined by sections 269D and 269E of the Act. If no substitutable goods are produced in Australia, the application is considered to meet the core criteria, leading to the issuance of a TCO. This instrument specifies the new duty rate applicable to the goods, which, in the case of Bluescope Steel Ltd's application for refractory gunning mixes, resulted in a reduced duty rate from 5% to 3%. The TCO process includes a public consultation phase where objections can be lodged, as evidenced by an objection from Shinagawa Refractories A/Asia Pty Ltd. A TCO is deemed to come into force on the date the application is lodged, but it does not affect rights or liabilities incurred prior to the registration date.
Key Provisions
The main operative sections of this legislation include sections 269C, 269F, and 269P of the Customs Act 1901 (referred to as the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO determines that the application meets the core criteria under section 269C, they must make a written order, or TCO, declaring the goods subject to the order. Section 269P(3) specifies that the CEO must make a TCO if satisfied that no substitutable goods were produced in Australia on the day the application was lodged. In this particular case, the TCO No. 0411190 was made on 11 March 2005, declaring that certain refractory gunning mixes are subject to a reduced rate of customs duty, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on parties governed by this Act include the requirement for applicants to ensure their applications for a TCO are lodged in compliance with the core criteria set out in section 269C of the Act. The CEO has the duty to evaluate applications and determine whether they meet the specified criteria, including the absence of substitutable goods produced in Australia. Upon making a TCO, the CEO must also ensure that a notice is published in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO, as per subsection 269K(1) of the Act.
In terms of offences and penalties, the Act does not explicitly outline specific offences or penalties for breaches related to the TCO process. However, the Act does provide for general enforcement mechanisms, such as the imposition of fines or imprisonment for breaches of the Customs Act or its regulations. These penalties are applicable for any violations that may arise in the course of applying for or administering a TCO. The maximum penalties for breaches of the Customs Act can include fines up to $10,000 and imprisonment for up to two years, as outlined in the relevant sections of the Act.
Additionally, the Act ensures that the rights of importers will be beneficially affected by the TCO. Under paragraph 126(1)(r) of the Regulations, importers of goods subject to the TCO 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, protecting them from any disadvantage or liabilities in respect of anything done or omitted to be done before the date of registration.