EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618078
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 1 November 2006.
Instrument
TCO No 0618078 was made on 23 July 2007. 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. One submission objecting to the TCO application was received from Shinagawa Refractories Australasia Pty Ltd.
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. 0618078 is taken to have come into force on 1 November 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 framework for the regulation of imports and exports, including the imposition and collection of customs duties. The Act establishes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to reduce the rate of customs duty on specified goods. The problem or gap addressed by this legislation is the potential for economic disadvantage to Australian businesses that rely on importing specific goods, particularly when no suitable substitute is produced locally. The policy objective of the Act, as highlighted in the Explanatory Statement for Tariff Concession Instrument No. 0618078, is to ensure that such businesses are not placed at a competitive disadvantage by high customs duties on essential imported goods. The Tariff Concession Instrument No. 0618078, made on 23 July 2007, grants a tariff concession to Bluescope Steel Ltd for certain refractory bricks and/or shapes, reducing the duty rate from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0618078 under the Customs Act 1901 applies to any goods for which a Tariff Concession Order (TCO) has been applied and subsequently approved by the Chief Executive Officer of Customs (CEO). This particular instrument pertains to specific refractory bricks and shapes, as applied for by Bluescope Steel Ltd on 1 November 2006, and the instrument itself came into effect on that same date. The Act allows for the application of a lower rate of customs duty to goods subject to a TCO, provided the core criteria are met, which includes ensuring that no substitutable goods are produced in Australia. The instrument has a national reach across Australia and applies to any entity involved in the importation of these specified refractory bricks and shapes. Exclusions to this Act are limited to goods specified in section 269SJ of the Customs Act, which are ineligible for TCOs. The scope of the Act can be extended or modified through subordinate instruments, facilitating further adjustments to the tariff concessions as needed.
Key Provisions
The primary operative sections of this legislation include sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901. Section 269C outlines the core criteria that a Tariff Concession Order (TCO) application must meet, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269D provides the meaning of 'goods produced in Australia', section 269E defines 'ordinary course of business', and section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a TCO. TCO No. 0618078 specifically applies to certain refractory bricks and shapes, reducing the duty rate from 5% to 0%.
The Act imposes several obligations on parties involved in the TCO process. An applicant, such as Bluescope Steel Ltd, must apply for a TCO and ensure that the application meets the core criteria outlined in section 269C. The CEO of Customs is required to assess the application, consult with stakeholders by publishing a notice in the Gazette (subsection 269K(1)), and consider any submissions received. If the CEO is satisfied that the application meets the core criteria, they must issue a written TCO order. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on anyone other than the Commonwealth.
In terms of penalties and consequences for breach, the Customs Act 1901 does not explicitly state penalties for failing to comply with the TCO process. However, any actions that contravene the Act or Regulations could result in civil or criminal penalties as outlined in other sections of the Act or related legislation. For instance, fraudulent activities or misrepresentations in the application process could lead to penalties under general criminal law or specific customs provisions.
The TCO No. 0618078 came into force on 1 November 2006, the date the application was lodged, as per subsection 269S(1). Importantly, the TCO does not affect the rights of any person, except to the benefit of importers who can apply for a refund of duty on goods imported since the effective date of the TCO. The rights of importers will be beneficially affected, but no liabilities will be imposed on any person due to the TCO. This ensures that the concessions do not disadvantage existing parties or impose new liabilities, while providing benefits to those importing the specified goods.