EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618986
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 parts on 27 November 2006.
Instrument
TCO No 0618986 was made on 02 March 2007. It declares that those certain blast furnace 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. 0618986 is taken to have come into force on 27 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, as supplemented by the Tariff Concession Instrument No. 0618986 issued in 2007, provides a framework for the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods. This legislation was enacted to address the gap in providing relief on customs duties for specific goods, ensuring that Australian industries do not face undue disadvantage when competing with imported products. The instrument, specifically TCO No. 0618986, was introduced to provide a tariff concession for certain blast furnace parts, reducing their duty from 5% to free, effective from the date the application was lodged. This was achieved by ensuring no substitutable goods were being produced in Australia at the time of application. The objective of this policy is to support Australian industries by making imported goods more competitively priced without imposing any liabilities or disadvantaging existing rights of non-applicants.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on specified goods. This legislative instrument applies to any person or entity seeking to import goods that are not produced in Australia in the ordinary course of business, thereby qualifying for a tariff concession. The geographic scope of this Act is national, given that it falls under Commonwealth jurisdiction, and it extends to all territories and states within Australia. The Act does not apply to goods specified in section 269SJ, which lists those ineligible for tariff concessions. The application process involves an applicant lodging an application with the CEO, who then assesses whether the goods meet the core criteria outlined in the Act, particularly ensuring no substitutable goods are produced domestically. The TCO No. 0618986, issued on 02 March 2007, is an example of this process, granting free duty on certain blast furnace parts, effective from 27 November 2006, the date the application was lodged.
Key Provisions
The Tariff Concession Instrument No. 0618986 under the Customs Act 1901 (the Act) concerns Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (the CEO) to apply lower rates of customs duty on specific goods (section 269F). A TCO can be applied for by any person in respect of goods that are not specified in section 269SJ of the Act (section 269F). For a TCO to be considered, the CEO must determine whether the application meets the core criteria set out in section 269C, which include ensuring that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively.
The Act imposes specific obligations on the CEO regarding the assessment and approval of TCO applications. The CEO must ensure that the application does not pertain to goods that are ineligible under section 269SJ and that it meets the core criteria outlined in section 269C. If these criteria are satisfied, the CEO must issue a written order, which is the TCO, specifying that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person to submit objections to the TCO if they believe it should not be made.
In the case of Instrument TCO No. 0618986, the CEO was satisfied that the application by Bluescope Steel Limited for blast furnace parts met the core criteria, and therefore, issued a TCO declaring that these parts were subject to item 50 of Schedule 4 of the Tariff, resulting in a duty rate of free instead of the general rate of 5%. Any breach of the provisions in the Act regarding TCOs could potentially lead to civil or criminal consequences, although specific offences and penalties are not detailed in the text provided. The Act, however, does outline the procedural framework that must be followed in the application and approval process for TCOs, ensuring that all parties are aware of their obligations and the potential consequences of non-compliance.