EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510288
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 Taphole Blocks on 5 August 2005.
Instrument
TCO No 0510288 was made on 21 October 2005. It declares that those certain Taphole Blocks 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 0%.
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. 0510288 is taken to have come into force on 5 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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia. One of its key features is the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made, as outlined in Part XVA. This scheme was introduced to address the need for a mechanism that allows for the reduction or exemption of customs duty on certain goods under specific circumstances. The enacting body responsible for the Customs Act 1901 is the Parliament of Australia. The policy objective of this legislation is to facilitate the importation of goods that are not produced in Australia, thereby supporting economic efficiency and protecting Australian industries from unfair competition. Tariff Concession Instrument No. 0510288, which was made under this Act, provides a lower rate of customs duty for certain Taphole Blocks, reflecting the policy intent to encourage trade and reduce costs for businesses importing these goods.
Scope and Application
The Tariff Concession Instrument No. 0510288, made under the Customs Act 1901, applies to specific goods, in this instance certain Taphole Blocks, and is intended to provide a lower rate of customs duty than the general rate specified in the Customs Tariff Act 1995. This instrument is applicable to the entities that import these goods, thereby potentially reducing their duty costs. The scope of the Act encompasses the entire Commonwealth of Australia and is administered by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Act. The CEO is required to determine if the application for a TCO meets the core criteria, which includes the absence of substitutable goods being produced in Australia in the ordinary course of business, as outlined in section 269C of the Act. Exclusions to the TCO application process are provided for in section 269SJ of the Act, which specifies certain goods that cannot be subject to a TCO. The commencement date of the TCO is the date on which the application was lodged, and it does not retroactively affect any rights or impose any liabilities prior to its registration, thus protecting the interests of all parties involved.
Key Provisions
The Tariff Concession Instrument No. 0510288, made under section 269P of the Customs Act 1901, establishes a concession on the duty payable for certain Taphole Blocks, which are goods used in the steel manufacturing industry (section 269P(3)). Specifically, this Instrument declares that the Taphole Blocks in question are subject to a 0% duty rate, as opposed to the general rate of 5% (section 269P(3)). This concession is contingent on the Chief Executive Officer of Customs (CEO) being satisfied that no substitutable goods are produced in Australia on the date the application was lodged (section 269C). The CEO's decision to grant the concession must also comply with the criteria outlined in section 269B and section 269D of the Act, which define terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods."
Parties or entities governed by this legislation, such as Bluescope Steel Ltd, must ensure that their applications for tariff concessions meet the stipulated criteria. This includes demonstrating that no substitutable goods are produced in Australia on the date of the application. Additionally, the CEO has an obligation to publish a notice in the Gazette inviting any interested parties to submit objections to the proposed concession (subsection 269K(1)). In the case of TCO No. 0510288, no submissions were received in response to this notice.
Breaching the provisions of the Customs Act 1901 can lead to various legal consequences. For instance, under section 246 of the Act, any person found guilty of an offence may be subject to a penalty of up to five times the amount of duty payable or $5,000, whichever is greater. Additionally, the Act allows for the imposition of civil penalties, which can include fines of up to $22,200 for individuals and $111,000 for corporations, for contravening specific sections of the Act. Criminal penalties may also apply, with imprisonment terms ranging up to two years for individuals, reflecting the seriousness with which the Act treats non-compliance.