EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512722
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 0512722 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.0512722 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 Tariff Concession Instrument No. 0512722 was enacted in 2005 as an amendment to the Customs Act 1901. This instrument was introduced to address the specific issue of applying tariff concessions to certain goods that were not being produced domestically. The Customs Act 1901, administered by the Parliament of Australia, provides a framework for tariff concessions through Tariff Concession Orders (TCOs), which can be applied for by interested parties. The policy objective behind this legislation is to ensure that when certain goods are not produced in Australia and there are no substitutable goods available domestically, a lower rate of customs duty can be applied, thus promoting fair trade practices and potentially aiding local industries.
The instrument was created following an application by Bluescope Steel Ltd for a tariff concession on specific steel sheets. After determining that no substitutable goods were produced in Australia, the Chief Executive Officer of Customs issued TCO No. 0512722, which applied a zero rate of duty on the specified steel sheets, effective from the date the application was lodged. This legislative action was taken without any submissions opposing the concession, ensuring that the rights of importers are positively impacted, including their eligibility for duty refunds on previously imported goods.
Scope and Application
The Customs Act 1901, through Part XVA, governs the scheme for Tariff Concession Orders (TCOs) under which reduced customs duty rates apply to specified goods. The Act allows for the Chief Executive Officer of Customs (CEO) to make TCOs on application by a person, provided the goods do not fall under the prohibitions set out in section 269SJ of the Act. The core criteria for the approval of a TCO, as per section 269C, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P(3). This TCO was exemplified in the case of Bluescope Steel Ltd, which applied for a concession on certain steel sheets, leading to TCO No. 0512722 which took effect from the date of the application, 23 September 2005. The TCO exempts these steel sheets from the general duty rate of 5%, applying a duty-free rate instead. The CEO's decision process includes publishing a notice in the Gazette inviting submissions from any person who might object to the TCO, although in this case, no submissions were received.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0512722 (subsection 269C, 269B, 269D, 269E, 269P(3) and section 269F) establish the conditions under which the Chief Executive Officer of Customs (CEO) can make a Tariff Concession Order (TCO). Specifically, section 269F allows an individual or entity to apply for a TCO, which applies a lower rate of customs duty on specified goods. A TCO is granted if the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as stipulated in section 269C. Additionally, the definitions of "goods produced in Australia", "ordinary course of business" and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively. Once the CEO is satisfied that an application meets the core criteria, they must make a written TCO order, as outlined in subsection 269P(3).
The obligations imposed by the Act on the parties governed by it include the requirement for applicants to ensure their applications are lodged under the correct provisions and meet the core criteria, as defined in sections 269C, 269B, 269D, and 269E. The CEO must review the application, verify that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, and subsequently make a written TCO order if the criteria are met. Furthermore, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made.
The Act does not explicitly outline any criminal or civil offences, penalties, or consequences for breach. However, it is implied that failure to comply with the requirements for a TCO application or the CEO's decision-making process could result in the application being rejected, and the applicant may not receive the tariff concession they sought. Additionally, if the CEO fails to properly follow the legislative requirements when making a TCO, this could lead to legal challenges or penalties under other relevant legislation. It is important for all parties involved to adhere to the provisions of the Customs Act 1901 and any applicable regulations to ensure a smooth and lawful process.