EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607588
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 blast valve bodies on 01 May 2006.
Instrument
TCO No 0607588 was made on 21 July 2006. It declares that those certain hot blast valve bodies 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. 0607588 is taken to have come into force on 01 May 2006.
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, includes provisions for Tariff Concession Orders (TCOs) which allow for the reduction or exemption of customs duty on specified goods. These provisions address the problem of ensuring that Australian industries can remain competitive by accessing goods that are not produced domestically, thus supporting economic growth and efficiency. The Tariff Concession Instrument No. 0607588 was introduced to provide tariff concessions on certain hot blast valve bodies, aligning with the policy objective of facilitating the importation of goods that are not produced in Australia, thereby avoiding the imposition of additional costs on businesses and consumers. The instrument was made by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thus meeting the core criteria for tariff concessions under section 269C of the Customs Act 1901.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which the Chief Executive Officer of Customs may issue to reduce customs duty on certain goods. A TCO can be applied for by any person in respect of goods, provided that the goods are not specified in section 269SJ, which outlines the exceptions to TCO eligibility. The application process involves meeting the core criteria stipulated in sections 269C, 269D, 269E, and 269F of the Act. Once the CEO determines that an application meets these criteria, they must issue a written TCO, specifying the lower rate of duty applicable to the goods. This particular legislation affects entities such as Bluescope Steel Limited who applied for and received a TCO for certain hot blast valve bodies, with the duty rate for these goods being reduced from the general rate of 5% to free under the specific item of Schedule 4 to the Customs Tariff Act 1995. The TCO does not retroactively affect the rights of any person other than the Commonwealth and imposes no liabilities on individuals other than the Commonwealth. Furthermore, the TCO provides beneficial rights to importers who can apply for duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0607588 under the Customs Act 1901 (section 269F) enable the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) if an application is made by a person seeking a lower rate of customs duty on certain goods. If the CEO is satisfied that the application meets the core criteria, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), the CEO must make a written order declaring that the goods are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995. In this case, the TCO No. 0607588 specifies that certain hot blast valve bodies are subject to a free rate of duty, which contrasts with the general rate of 5% (section 269P(3)).
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to ensure that an application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also satisfy the core criteria outlined in section 269C, including the absence of substitutable goods produced in Australia. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0607588, no submissions were received in response to this notice.
Any breaches of the requirements set out in the Customs Act 1901 may lead to civil or criminal consequences, though specific offences, penalties, or consequences are not detailed in the explanatory statement. However, it is essential to note that the TCO does not affect the rights of any person as at the date of registration to the disadvantage of that person or impose any liabilities in respect of actions taken before the date of registration (subsection 269S(1)). The rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).