EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0501344
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 blast furnace equalising and relief valve shafts on 1 February 2005.
Instrument
TCO No 0501344 was made on 8 April 2005. It declares that those certain blast furnace equalising and relief valve shafts 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. 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. 0501344 is taken to have come into force on 1 February 2005.
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, provides a framework for the regulation of customs and excise duties. Part XVA of this Act establishes the scheme for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain goods. The Tariff Concession Instrument No. 0501344 was introduced to address the specific need of Bluescope Steel Ltd for lower duty rates on blast furnace equalising and relief valve shafts, which were not being produced in Australia at the time of the application. The policy objective behind the TCO scheme is to facilitate the importation of goods that are not domestically produced, thereby supporting Australian industries that rely on imported materials for their operations. The Customs Act mandates that the Chief Executive Officer of Customs must consider applications for TCOs against certain criteria, such as the absence of substitutable goods produced in Australia, before granting a concession.
Scope and Application
The Tariff Concession Instrument No. 0501344 pertains to the Customs Act 1901 and applies specifically to goods that are the subject of a Tariff Concession Order (TCO). The Act applies to any individual or entity that imports goods subject to a TCO, effectively granting a reduced rate of customs duty for those goods as stipulated in the TCO. The scope of the legislation is national, extending across all jurisdictions in Australia, as it is a Commonwealth Act. However, it is important to note that the Act does not apply to goods specified in section 269SJ of the Customs Act, which lists items that are ineligible for a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995, which provides further detail on the tariff rates applicable to specific goods. The process for applying for a TCO involves a submission to the Chief Executive Officer of Customs, who then determines whether the application meets the core criteria for a concession. Once granted, a TCO takes effect from the date the application was lodged, as outlined in the Customs Act.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0501344 under the Customs Act 1901 (section 269F) detail the process through which a Tariff Concession Order (TCO) may be applied for and granted. A person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods (section 269F). If the CEO is satisfied that the application is valid and does not pertain to goods that cannot be subject to a TCO (section 269SJ), the CEO must decide if the application meets the core criteria (section 269C). Specifically, the CEO must be convinced that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C, 269D, 269E). If these criteria are met, the CEO must issue a written order declaring that the goods are subject to a lower rate of customs duty (section 269P(3)). This process is exemplified in TCO No. 0501344, which applies to certain blast furnace equalising and relief valve shafts, reducing their duty rate from 5% to 3%.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their TCO application meets the criteria set out in the Act, particularly that no substitutable goods are being produced in Australia (section 269C). The CEO has the responsibility to assess the validity of the application and to decide whether it meets the core criteria. If the application is valid, the CEO must make the TCO and publish a notice in the Gazette inviting any interested party to submit objections (subsection 269K(1)). In the case of TCO No. 0501344, the CEO did not receive any submissions in response to the published notice.
The Act includes provisions for offences and penalties, although these are not detailed in the Explanatory Statement. In general, breaches of the Customs Act 1901 may result in both civil and criminal penalties. Civil penalties can include fines and other monetary penalties, while criminal penalties may include imprisonment, depending on the severity and nature of the breach. The maximum penalties are not specified in this particular document but are typically detailed in the relevant sections of the Customs Act 1901. The Act ensures that the TCO does not affect the rights of any person adversely, and it also provides for the refund of duties to importers who were subject to the higher duty rate before the TCO came into force (paragraph 126(1)(r) of the Regulations).