EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618047
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 refractory bricks and/or shapes on 4 October 2006.
Instrument
TCO No 0618047 was made on 29 December 2006. It declares that those certain refractory bricks and/or shapes 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 0%.
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. 0618047 is taken to have come into force on 4 October 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 was enacted by the Australian Parliament to provide a comprehensive framework for the regulation of customs and excise duties. Among its provisions, Part XVA introduced a scheme for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain goods. This mechanism was introduced to address the problem of ensuring that Australian industries could access necessary imported goods at a reduced cost, thereby supporting local businesses and encouraging economic growth. The Tariff Concession Instrument No. 0618047 was made under this scheme by the Chief Executive Officer of Customs, who determined that Bluescope Steel Ltd's application for a TCO for certain refractory bricks and shapes met the core criteria. As a result, a zero per cent duty rate was applied to these goods, down from the general rate of five per cent, effective from the date of the application, 4 October 2006. This decision was made without any submissions against the application and does not disadvantage any person or impose new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods, applying to entities and individuals involved in the importation of these goods. The Act applies nationally across Australia, as it is a Commonwealth Act. Any entity or individual seeking a reduction in customs duty on specific goods may apply for a TCO, provided that the goods are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The application process involves satisfying core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. Once a TCO is issued, it applies retroactively to the date of the application, without affecting any pre-existing rights or imposing liabilities for actions taken before the TCO's registration. The scope of the Act may be further defined through subordinate instruments, which can detail specific processes or additional criteria for TCO applications.
Key Provisions
The Customs Act 1901, particularly under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) which are instrumental in determining the customs duty rates for certain goods. Section 269F of the Act outlines the process by which a person may apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. For the application to be considered, it must not pertain to goods listed in section 269SJ of the Act, which are ineligible for TCOs. Section 269C stipulates that for an application to meet the core criteria, no substitutable goods should have been produced in Australia at the time the application was lodged. The terms "substitutable goods" and "goods produced in Australia" are defined in sections 269D and 269E respectively, ensuring clarity in the application process.
The obligations imposed by the Act on the CEO involve assessing the application against the core criteria specified in section 269C. If satisfied that the application meets these criteria, the CEO is mandated by subsection 269P(3) to issue a written TCO, declaring the goods subject to the application as being covered by a specified item in Schedule 4 to the Customs Tariff Act 1995. In the case of Bluescope Steel Ltd, the CEO issued TCO No. 0618047 on 29 December 2006, recognising the absence of substitutable goods in Australia for certain refractory bricks and shapes, thereby applying a 0% duty rate to these goods.
Upon acceptance of a TCO application, subsection 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested party to submit reasons why the TCO should not be granted. In the instance of TCO No. 0618047, no submissions were received, which facilitated the CEO's decision. The TCO is deemed to have come into force on the date the application was lodged, as per subsection 269S(1). This commencement date, 4 October 2006, ensures that the rights of persons other than the Commonwealth are preserved, and no new liabilities are imposed retroactively. Importers benefit from this provision as they can apply for duty refunds on goods imported since the effective date of the TCO.
For breaches of the provisions outlined in the Customs Act 1901 or any associated regulations, the Act provides for both civil and criminal consequences. Offences may include knowingly providing false or misleading information in an application for a TCO, which could result in substantial penalties. Under the Act, penalties for providing false information can include fines up to a maximum of $22,000 or imprisonment for up to five years, or both, for individuals, and higher penalties for corporations. These stringent measures ensure compliance and maintain the integrity of the tariff concession process.