EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515405
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 hot rolled steel sheet JIS on 04 November 2005.
Instrument
TCO No 0515405 was made on 23 January 2006. It declares that those certain hot rolled steel sheets JIS 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. 0515405 is taken to have come into force on 04 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 was enacted to provide a comprehensive framework for the regulation of imports and exports in Australia, including the imposition and remission of customs duty. The Act was introduced to address the need for a structured and systematic approach to managing the flow of goods across Australia’s borders, ensuring that customs duties are collected fairly and efficiently. The Customs Act 1901 is administered by the Parliament of Australia, with the objective of facilitating trade while also protecting domestic industries and revenue. One specific aspect of the Customs Act 1901 is the scheme for Tariff Concession Orders (TCOs), which was established to provide relief from customs duties under certain conditions, thus encouraging trade and investment by reducing the cost of importing specific goods. The explanatory statement for Tariff Concession Instrument No. 0515405 illustrates this scheme in action, demonstrating how an application for a TCO can result in tariff concessions being granted to importers of specified goods.
Scope and Application
The Customs Act 1901 applies to the regulation of customs duties in Australia, and the Tariff Concession Instrument No. 0515405 specifically pertains to the scheme under which Tariff Concession Orders (TCOs) may be made. This instrument applies to entities such as Bluescope Steel Limited that are seeking a concession on customs duties for certain goods, in this case, hot rolled steel sheets JIS. The application of this legislation is confined to Commonwealth jurisdiction, and it operates to grant concessions on the customs duty rates specified in the Customs Tariff Act 1995. The Act does not apply to goods specified in section 269SJ of the Customs Act, which are ineligible for a TCO. The application of a TCO is contingent on the core criteria being met, specifically that no substitutable goods were produced in Australia on the day the application was lodged. The application process requires publication in the Gazette to invite any submissions opposing the concession before a decision is made by the CEO. The TCO does not affect any existing rights or liabilities of parties other than the Commonwealth, and it imposes no new liabilities or disadvantages. The TCO extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the tariff rates that may be subject to a concession.
Key Provisions
The main operative sections of the Customs Act 1901, in relation to Tariff Concession Orders (TCOs), are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must then assess whether the application meets the core criteria, as defined in section 269C. This requires, among other things, that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in sections 269B and 269D. If the CEO is satisfied that the application meets the core criteria, they must issue a written order, which is the TCO, as specified in section 269P(3). In this case, Tariff Concession Order (TCO) No. 0515405 applies to certain hot rolled steel sheets JIS, reducing the duty rate from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on the parties governed by the legislation include the requirement for the CEO to ensure that any TCO application is valid and meets the core criteria before issuing the order. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as required by subsection 269K(1). In this instance, the CEO did not receive any submissions in response to the published notice. Additionally, the Act ensures that 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 in respect of anything done or omitted to be done before the date of registration.
The Customs Act 1901 provides for civil and criminal consequences for breaches of the legislation, although no specific offences or penalties are mentioned in relation to TCOs. However, in general, the Act empowers the CEO to take action against persons who contravene the Act or the Regulations. The CEO can also apply to a court for an injunction or other remedy to enforce compliance with the Act or the Regulations. In addition, a person who contravenes a provision of the Act may be subject to penalties, such as fines or imprisonment, as determined by the court. The maximum penalties for offences under the Customs Act 1901 can vary depending on the nature and severity of the offence, with some offences carrying penalties of up to 10 years imprisonment or substantial fines.