EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509820
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 refractory taphole fillers on 25 July 2005.
Instrument
TCO No 0509820 was made on 07 October 2005. It declares that those certain refractory taphole fillers 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. 0509820 is taken to have come into force on 25 July 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 was enacted by the Australian Parliament to regulate customs and border control and provide for the imposition of customs duty. The Act established a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA, which allows the Chief Executive Officer of Customs to reduce the customs duty on certain goods if specified criteria are met. This instrument was introduced to address the need for tariff flexibility to support industries that cannot compete with domestically produced goods, thereby encouraging trade and economic growth. Policy objectives include facilitating competitive imports and providing relief to industries that cannot domestically produce certain goods, as outlined in the Act. The instrument, Tariff Concession Instrument No. 0509820, was developed in response to an application from Bluescope Steel Limited for tariff concessions on refractory taphole fillers, which was approved as no substitutable goods were being produced in Australia. The instrument came into force on the date of the application, 25 July 2005, and does not affect existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of tariffs on imported goods and allows for tariff concessions on specific goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This process applies to entities seeking lower duty rates on certain goods they intend to import into Australia, provided that the goods are not prohibited under section 269SJ of the Act and meet the core criteria outlined in sections 269C, 269B, and 269D of the Act. The concession becomes effective on the date the application is lodged, and entities such as Bluescope Steel Limited may apply for such concessions. The Act ensures that the TCO does not disadvantage any person or impose liabilities on them in relation to actions taken before the order's registration. The scope of the Act is national, applying throughout Australia, and the application process requires public consultation, although in this instance, no submissions were received. The application and issuance of TCOs can be further detailed through subordinate instruments under the Act.
Key Provisions
The Tariff Concession Order No. 0509820, under section 269F of the Customs Act 1901, allows the Chief Executive Officer of Customs (CEO) to grant tariff concessions on specific goods. This means that a lower rate of customs duty can be applied to goods that meet the criteria for a Tariff Concession Order (TCO). For the CEO to consider granting a TCO, an application must be made by a person in relation to the goods in question, and it must be ensured that these goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must proceed to make a written TCO order. This order specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, the CEO has declared that certain refractory taphole fillers are subject to a 5% duty rate under the general tariff, but with this TCO, the duty rate for these goods is set to free.
The obligations imposed by the Customs Act 1901 on the parties involved primarily revolve around the application process and the conditions under which a TCO can be granted. The CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO must also ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO must ensure that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the granting of a TCO. However, the general principles of administrative law and the common law would apply to any actions taken by the CEO in the process of granting or refusing a TCO. If an error or irregularity occurs in the process, it could potentially lead to legal challenges or administrative reviews. The consequences of a TCO being found invalid could include the reapplication of the standard tariff rates to the goods in question, which might lead to financial repercussions for importers who have already benefited from the concession. Furthermore, if the TCO imposes any unintended liabilities or disadvantages to persons other than the Commonwealth, it could result in further legal scrutiny and potential amendments to the order to rectify any issues.