EXPLANATORY STATEMENT
Tariff Concession Instrument No.0503990
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 Limited applied for a TCO in respect of certain torpedo ladle refractory bricks or shapes (70% alumina) on 7 April 2005.
Instrument
TCO No 0503990 was made on 17 June 2005. It declares that those certain torpedo ladle refractory bricks or shapes (70% alumina) 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. 0503990 is taken to have come into force on 7 April 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 Australian Parliament, provides a framework for the administration of customs and excise duties in Australia. One of the key mechanisms within this framework is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA of the Act. These orders allow for a lower rate of customs duty to be applied to certain goods, provided that they meet specific criteria such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0503990, enacted on 17 June 2005, is an example of such an order. It was introduced to address the specific needs of Bluescope Steel Limited, which applied for a tariff concession for certain torpedo ladle refractory bricks or shapes (70% alumina). The instrument was made following a determination by the CEO that no substitutable goods were produced in Australia, thereby meeting the core criteria under section 269C of the Act. The policy objective here is to ensure that Australian businesses can access essential goods at a reduced duty rate, promoting economic efficiency and competitiveness without imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0503990, made under the Customs Act 1901, applies to specific goods, namely certain torpedo ladle refractory bricks or shapes (70% alumina), and relates to Bluescope Steel Limited's application for a Tariff Concession Order (TCO) for these goods. The TCO applies to the goods specified in the order, which in this case are those defined in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument grants a concession on the customs duty for these goods, reducing the general duty rate from 5% to free, provided that the application meets the core criteria stipulated in the Customs Act. The application process involves an assessment by the Chief Executive Officer of Customs to determine if no substitutable goods are produced in Australia in the ordinary course of business. This concession is applicable nationally and aims to benefit importers by potentially allowing them to apply for a refund of duty on the goods imported since the TCO's effective date. The instrument does not affect the rights of any person, except to the benefit of importers, nor does it impose any liabilities on any person other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0503990, made under the Customs Act 1901, establishes a tariff concession order (TCO) for certain torpedo ladle refractory bricks or shapes containing 70% alumina (section 269C). A TCO application is made under section 269F and is subject to the CEO's satisfaction that it meets the core criteria, specifically that no substitutable goods are produced in Australia on the date the application is lodged (section 269P(3)). Once a TCO is made, it declares that the specified goods will be subject to a lower rate of customs duty, in this case, free of charge, whereas the general rate is 5% (section 269P(3)). The instrument is published in the Gazette, inviting submissions from any interested parties, although in this case, no submissions were received (subsection 269K(1)).
The obligations imposed by this TCO on the relevant parties are primarily procedural and administrative. The CEO must ensure that any TCO application is assessed against the core criteria, and if satisfied, must make a written order detailing the tariff concession (section 269P(3)). The CEO is also required to publish a notice in the Gazette, inviting submissions from any interested parties, although this does not appear to have occurred in this instance (subsection 269K(1)). Importers of the specified goods can benefit by applying for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations may result in various civil or criminal consequences. While the specific penalties are not detailed in this particular TCO, breaches of the Customs Act generally can lead to substantial penalties. For example, knowingly making a false statement in a customs declaration can result in a penalty of up to 10,000 penalty units or imprisonment for five years, or both, under section 234A of the Act. Additionally, failing to comply with the duty refund provisions could result in financial penalties or the inability to claim a refund, depending on the specific circumstances and the relevant sections of the Act and Regulations.