EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618736
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 blast furnace stove parts on 21 November 2006.
Instrument
TCO No 0618736 was made on 02 March 2007. It declares that those certain blast furnace stove parts 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. 0618736 is taken to have come into force on 21 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 Tariff Concession Instrument No. 0618736 was enacted in 2007 under the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to reduce the customs duty on certain goods. The Act addresses the problem of ensuring that Australian businesses can access competitively priced imported goods, particularly when no domestic alternatives are available. The instrument was developed in response to an application from Bluescope Steel Limited for a tariff concession on specific blast furnace stove parts, where the CEO determined that no substitutable goods were produced in Australia. The tariff concession was implemented to ensure that the general rate of duty, which is 5%, is reduced to free for these specified goods, thereby benefiting importers who can apply for duty refunds on goods imported since the instrument came into effect on 21 November 2006. The process involved publishing a notice in the Gazette to invite submissions, though none were received, allowing the tariff concession to proceed without opposition.
Scope and Application
The Tariff Concession Instrument No. 0618736 applies to goods that are the subject of a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901. Specifically, it relates to blast furnace stove parts applied for by Bluescope Steel Limited, which the Chief Executive Officer of Customs has determined are not substitutable by any goods produced in Australia in the ordinary course of business. The Act allows for the application of a lower rate of customs duty on such goods, and this Instrument establishes that these particular blast furnace stove parts will be subject to a duty rate of free, as opposed to the general rate of 5%. The geographic reach of this Act is national, applying across all states and territories of Australia. There are no stated exclusions or exemptions within this particular Instrument, although section 269SJ of the Customs Act 1901 sets out goods that cannot be subject to a TCO. The Instrument does not explicitly extend or restrict application through subordinate instruments, but the process for making TCOs and the criteria for such orders are outlined in the Customs Act 1901, allowing for potential future expansion or refinement through additional legislative or administrative actions.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Order (TCO) No. 0618736, include section 269F, which allows a person to apply for a TCO with respect to goods, and section 269P, which mandates the Chief Executive Officer (CEO) of Customs to make a written order if the application meets certain criteria. Specifically, under section 269C, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that these conditions are met, they must issue a TCO, as outlined in section 269P(3). This order declares that the goods in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, thereby applying a lower rate of duty.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must submit an application to the CEO, as per section 269F. The CEO then has the responsibility to review the application and determine whether it meets the core criteria, as defined in section 269C. If the CEO decides to proceed, they must publish a notice in the Gazette inviting submissions from interested parties, in accordance with subsection 269K(1). Should no submissions be received, the CEO can proceed to make the TCO. Additionally, section 269S(1) stipulates that the TCO comes into force on the day the application is lodged, ensuring timely application of the tariff concession.
Breaching the conditions or requirements set forth by the Customs Act 1901 can result in significant legal consequences. Although the explanatory statement does not specify penalties for non-compliance with the TCO, general penalties for breaches of the Customs Act can include fines and imprisonment. For example, under section 234 of the Customs Act, a person who wilfully makes a false or misleading statement in connection with an import or export declaration can be fined up to $22,000 or imprisoned for up to two years, or both. Similarly, section 235 imposes fines up to $55,000 or imprisonment for up to five years, or both, for more serious breaches such as smuggling. Therefore, any failure to comply with the requirements of a TCO or the Act itself could potentially result in severe civil or criminal penalties.