EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618985
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 hot blast valve parts on 28 November 2006.
Instrument
TCO No 0618985 was made on 02 March 2007. It declares that those certain blast furnace hot blast valve 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. 0618985 is taken to have come into force on 28 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 to provide a comprehensive framework for the regulation of customs and excise, including the imposition and collection of customs duty. In addressing a gap in the existing legislative scheme, the Customs Act introduced the concept of Tariff Concession Orders (TCOs) under Part XVA. The 2007 Tariff Concession Instrument No. 0618985 was made by the Chief Executive Officer of Customs, who was satisfied that the application by Bluescope Steel Limited for a TCO concerning certain blast furnace hot blast valve parts met the core criteria. The instrument was introduced to provide a tariff concession for these specific goods, resulting in a reduction of the duty rate from 5% to free, effective from the date the application was lodged on 28 November 2006. This legislative measure aims to facilitate trade and reduce costs for importers of these goods by eliminating the customs duty, thereby encouraging the importation of these particular items into Australia.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This act enables the application of lower rates of customs duty on goods that are the subject of a TCO. Section 269F of the Act allows any person to apply to the CEO for a TCO in respect of specific goods, provided the application does not pertain to goods listed in section 269SJ which are ineligible for TCOs. The CEO must assess if the application meets the core criteria, particularly whether no substitutable goods were produced in Australia in the ordinary course of business on the date of the application, as defined under sections 269C and 269D. If the CEO is satisfied with the application, a TCO is issued, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The geographic and jurisdictional reach of this legislation is nationwide, applying to all goods imported into Australia. The application of the act is not restricted by state or territory boundaries but is uniformly applied across the Commonwealth. The act does not explicitly state exclusions, but it does exclude certain goods as specified in section 269SJ. The application of the Act may be extended or modified through subordinate instruments, such as the Customs Tariff Act 1995, which provides the schedule of tariff items applicable to goods under TCOs.
Key Provisions
The Customs Act 1901, specifically within Part XVA, details the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (section 269F). When a person applies for a TCO in respect of goods (section 269F), the CEO must first determine whether the application is for goods not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria (section 269C), they 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 applies (subsection 269P(3)). This means that a lower rate of customs duty applies to these goods. In the case of TCO No. 0618985, the CEO determined that no substitutable goods were produced in Australia, thus the TCO was made, and the general rate of duty of 5% was reduced to free for the specified blast furnace hot blast valve parts.
The Act imposes several obligations on the parties involved. For applicants, they must ensure their application for a TCO is for goods not listed in section 269SJ of the Act (section 269F). The CEO, on receiving a valid application, must assess whether it meets the core criteria outlined in section 269C, and if so, must make a TCO (subsection 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). If the CEO does not receive any submissions, they proceed to make the TCO. The CEO's decision must be based on whether the application meets the criteria that no substitutable goods were produced in Australia on the day the application was lodged.
Failure to comply with the provisions of the Customs Act 1901, particularly in the context of TCOs, may lead to legal consequences. However, the explanatory statement does not explicitly detail specific offences, penalties, or consequences for breach of the Act in this context. The primary focus is on the procedural correctness and the criteria for making a TCO. Nevertheless, it is reasonable to infer that any misapplication or misuse of the TCO process could potentially lead to legal action, with penalties varying based on the specific breach and applicable laws. The Act does ensure that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).