EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510009
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 parts on 01 August 2005.
Instrument
TCO No 0510009 was made on 14 October 2005. It declares that those certain walking beam furnace parts 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. 0510009 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 Commonwealth Parliament, includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This mechanism allows the Chief Executive Officer of Customs to grant tariff concessions on certain goods, effectively reducing customs duty rates for those goods. The Tariff Concession Instrument No. 0510009, made on 14 October 2005, is an example of such an order. It was introduced in response to an application by Bluescope Steel Limited for tariff concessions on specific walking beam furnace parts. The policy objective was to ensure that these particular parts would be subject to a zero rate of duty, provided no substitutable goods were produced in Australia, thereby facilitating easier access to these components and potentially supporting industrial activities that rely on them. The instrument became effective from the date the application was lodged, 1 August 2005, and did not disadvantage any existing rights or impose new liabilities on any person.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) which lower customs duties on specified goods. These orders apply to individuals or entities that apply for them and successfully meet the core criteria set out in the Act, which include the absence of substitutable goods being produced in Australia in the ordinary course of business on the day the application was lodged. This concession is intended to benefit importers of these goods, allowing them to apply for a refund of duty on imports made since the TCO was taken to be in effect from the date the application was lodged. The geographic reach of this legislation is national, applying across Australia and governed by the Commonwealth. Notably, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person. The scope of the Act is further extended through subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable duty rates and the conditions under which the TCO is granted.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0510009) relate to the creation and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269C (1) stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the Chief Executive Officer of Customs (CEO) must make a written order, a TCO, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This specific TCO, No. 0510009, pertains to certain walking beam furnace parts and declares that these parts are subject to item 50 of Schedule 4, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on parties and entities it governs. Firstly, under section 269F, a person may apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess the application against the core criteria stipulated in section 269C. If the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business, the CEO is obligated to make a TCO (section 269P(3)). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received in response to the notice.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. The Act does not explicitly state offences or penalties for non-compliance with TCO provisions; however, breaches of other sections of the Customs Act may lead to civil or criminal penalties. For instance, under section 213 of the Customs Act, the CEO can impose financial penalties for breaches related to customs duty, which could include substantial fines. Additionally, section 214 of the Act allows for prosecution in cases of serious breaches, which could result in imprisonment. The specific penalties for non-compliance with TCO provisions would depend on the nature of the breach and relevant sections of the Customs Act.