EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510008
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 walking beam furnace, furnace casings on 01 August 2005.
Instrument
TCO No 0510008 was made on 07 October 2005. It declares that those certain walking beam furnace, furnace casings 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. 0510008 is taken to have come into force on 01 August 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, addresses the need to streamline the process of granting tariff concessions for certain imported goods. Specifically, Part XVA of the Act establishes a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs), which apply a reduced rate of customs duty to specified goods. This mechanism was introduced to ensure that Australian importers of certain goods can access these products at a lower cost, thus supporting trade efficiency and economic competitiveness. Bluescope Steel Limited’s application for a TCO in respect of certain walking beam furnace, furnace casings exemplifies this process, as the CEO was satisfied that no substitutable goods were produced in Australia, leading to the concession of free duty on these specific items. The enactment of TCO No. 0510008 on 07 October 2005, effective from 01 August 2005, reflects the Act’s objective to facilitate the import of goods that are not domestically produced, thereby benefiting the rights of importers.
Scope and Application
The Tariff Concession Instrument No. 0510008 under the Customs Act 1901 applies to the specific goods that Bluescope Steel Limited applied for, namely certain walking beam furnace and furnace casings. The Act applies to the Chief Executive Officer of Customs, who is responsible for deciding whether an application for a Tariff Concession Order (TCO) meets the core criteria and subsequently making the TCO if the criteria are satisfied. This legislation affects entities that import or plan to import these specified goods, granting them the benefit of a lower rate of customs duty as stipulated in the TCO. The geographic reach of this Act is national, as it pertains to the Customs Act 1901, which is a Commonwealth Act. However, the application of the TCO is limited to the specific goods mentioned in the instrument and does not extend to any other goods unless explicitly covered by another TCO. Exclusions from the TCO include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application process involves an assessment by the CEO to ensure that the goods in question are not substitutable by goods produced in Australia in the ordinary course of business. This instrument does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration, except to the beneficial effect of importers who can apply for a refund of duty.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are sections 269C, 269B, and 269P. Section 269C specifies the core criteria that a TCO application must meet, which is primarily that no substitutable goods are produced in Australia on the day the application was lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, they must issue a TCO. For example, in this case, the CEO issued TCO No. 0510008 on 7 October 2005, declaring that certain walking beam furnace, furnace casings are goods to which a specific item of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a free rate of duty instead of the general 5% rate.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for TCOs. If the application is valid, the CEO must evaluate whether it meets the core criteria as outlined in section 269C. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who might have objections to lodge a submission. In this instance, the CEO did not receive any submissions against the application for TCO No. 0510008. Furthermore, the Act ensures that the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, and it does not impose any liabilities on any person.
Breach of the requirements or conditions set out in the Customs Act 1901 can lead to various consequences. Under the Act, there are both civil and criminal penalties for non-compliance. The maximum penalties for contravening the Act can include substantial fines and, in some cases, imprisonment. For instance, the Act provides for fines of up to 10,000 penalty units and/or imprisonment for up to five years for serious breaches, such as providing false or misleading information in an application for a TCO. These penalties are intended to ensure compliance with the legislative framework and to maintain the integrity of the customs duty system.