EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515399
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 unpickled hot rolled steel sheet in coils on 07 November 2005.
Instrument
TCO No 0515399 was made on 23 January 2006. It declares that those certain unpickled hot rolled steel sheets in coils 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. 0515399 is taken to have come into force on 07 November 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, provides a framework for the administration of customs and excise, including the ability to make Tariff Concession Orders (TCOs) which allow for the reduction of customs duty on certain goods. The Tariff Concession Instrument No. 0515399, made in 2006, addresses the specific problem of ensuring that tariff concessions are appropriately applied to goods that do not have substitutable domestic production, thereby preventing domestic industries from being unfairly disadvantaged by imported goods. The instrument was created following an application by Bluescope Steel Limited for tariff concessions on certain unpickled hot rolled steel sheets in coils, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. The instrument declares that these specific goods are subject to a zero rate of duty, effective from the date of the application, thereby promoting fair trade practices and supporting domestic industries.
Scope and Application
The Tariff Concession Instrument No. 0515399 under the Customs Act 1901 applies specifically to certain unpickled hot rolled steel sheets in coils as submitted by Bluescope Steel Limited. This Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which results in a reduced rate of customs duty for goods specified in the order. The geographic reach of this legislation is national, as it operates within the framework of the Commonwealth’s customs laws. The application process mandates that the CEO must ensure the goods in question are not among those specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO, and must confirm that no substitutable goods are produced in Australia. The TCO, once made, applies retroactively from the date of the application, meaning that importers of such goods can seek a refund of duty from the date the TCO is considered to have come into force. Importantly, this legislation does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0515399 (TCo) under the Customs Act 1901 are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCo) in respect of goods. If the application meets the core criteria (section 269C), which includes the absence of substitutable goods produced in Australia (section 269D), the CEO must make a written TCo (section 269P). This TCo applies to specific goods, in this case, certain unpickled hot rolled steel sheets in coils, and declares them subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby granting them a duty-free status. Section 269S stipulates that the TCo comes into force on the day the application is lodged, in this instance, 07 November 2005.
The TCo imposes obligations on the CEO of Customs to review the application, determine if it meets the core criteria, and if satisfied, make a written TCo. Additionally, under section 269K, the CEO must publish a notice in the Gazette inviting submissions from any person who may object to the TCo. In this case, no objections were received. The TCo also benefits importers by allowing them to apply for a refund of duty on goods imported since the TCo's effective date under Regulation 126(1)(r).
Section 269SJ of the Customs Act 1901 specifies certain goods that cannot be the subject of a TCo. These include goods that are subject to prohibitions, restrictions, or other specific controls. However, if a TCo is made for goods that are not specified in section 269SJ, and the core criteria are met, the CEO must proceed with the TCo. In this particular case, the CEO determined that the unpickled hot rolled steel sheets in coils were not prohibited or restricted and met the core criteria, leading to the issuance of TCo No. 0515399.
The Customs Act 1901 provides for offences and penalties in the event of non-compliance with the provisions of the Act and related instruments, such as the TCo. For example, knowingly making a false or misleading statement in an application for a TCo could lead to criminal charges under section 235 of the Act, with penalties including fines and imprisonment. Additionally, failure to comply with the terms of a TCo could result in civil penalties, such as fines, under section 290. The maximum penalties for such offences are detailed in the Criminal Code Act 1995, which may include substantial fines and imprisonment terms depending on the severity of the offence.