EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512721
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 steel sheets on 23 September 2005.
Instrument
TCO No 0512721 was made on 16 December 2005. It declares that those certain steel sheets 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.0512721 is taken to have come into force on 23 September 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, establishes a framework for administering customs and excise duties, including provisions for Tariff Concession Orders (TCOs). The Act was designed to streamline the process for granting tariff concessions on specific goods, ensuring that such concessions are only awarded under certain conditions and with due consideration for the domestic production landscape. The introduction of this legislation aimed to address the need for a structured and transparent process for tariff concessions, thereby encouraging trade while protecting local industries from undue competition.
The Tariff Concession Instrument No. 0512721, issued under the Customs Act 1901, was made to provide tariff concessions on certain steel sheets, following an application by Bluescope Steel Ltd. The Explanatory Statement details that the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. This concession sets the duty rate for these specific steel sheets at zero, down from the general rate of 5%. The policy objective is to facilitate trade by reducing duty rates on certain imported goods, thereby benefiting importers while ensuring that local production is not adversely affected.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation and application of Tariff Concession Orders (TCOs) that lower customs duty rates on certain goods. This Act applies to any person or entity that applies for a TCO and seeks a reduced duty rate on specific goods, provided the goods are not those excluded under section 269SJ. The Act's application extends across Australia and is administered by the Chief Executive Officer of Customs, who must assess whether the application meets the core criteria outlined in sections 269C, 269D, 269E, and 269F. The TCO process also includes a public consultation period where objections can be lodged, though in this case, no submissions were received. Once a TCO is issued, it is effective from the date the application was lodged, benefiting importers by potentially allowing them to claim refunds for duties paid on the goods prior to the TCO's effective date, without imposing any new liabilities on individuals or entities.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCOs) by any person to the Chief Executive Officer (CEO) of Customs, provided the goods in question do not fall under the exclusions listed in section 269SJ. If the CEO is satisfied that the application meets the core criteria specified in section 269C, they are required to make a written order (section 269P(3)) that effectively reduces the customs duty rate for the specified goods. In this case, the CEO determined that the application from Bluescope Steel Ltd for certain steel sheets met the criteria, leading to the issuance of TCO No. 0512721, which exempts these steel sheets from the general rate of duty, applying a rate of duty of free instead of the usual 5%.
The Act imposes several obligations on the parties involved. Firstly, any applicant for a TCO must ensure their application meets the core criteria set out in section 269C, which involves proving that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, on the other hand, is mandated to publish a notice in the Gazette (section 269K(1)) inviting submissions from any interested parties who might oppose the making of the TCO. In this instance, the CEO did not receive any submissions against the TCO application. Additionally, the Act ensures that the TCO does not retroactively disadvantage any person or impose new liabilities on them for actions taken before the TCO came into force.
Failure to comply with the requirements of the Customs Act 1901 can result in significant consequences. The Act does not explicitly detail the offences or penalties for breach in the provided text; however, it is understood that non-compliance with customs regulations can lead to civil or criminal penalties under other sections of the Act or related legislation. The severity of these penalties can vary widely depending on the nature and extent of the breach, but they can include fines and imprisonment for criminal offences, as well as financial penalties for civil breaches. For instance, knowingly making a false statement in a customs document can lead to substantial fines and potential imprisonment.