EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618987
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 0618987 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. 0618987 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 Tariff Concession Instrument No. 0618987, enacted in 2007, was introduced under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this case, certain blast furnace parts. The Australian Parliament established the framework for Tariff Concession Orders (TCOs) to ensure that Australian industries remain competitive by reducing the duty on imported goods that are not produced domestically, thus promoting economic efficiency and supporting industry growth. The instrument was made by the Chief Executive Officer of Customs in accordance with section 269F of the Act, following an application by Bluescope Steel Limited. The policy objective was to provide a zero-rate duty on these specific blast furnace parts, as no substitutable goods were being produced in Australia, thereby facilitating easier and more cost-effective importation of these essential components.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process of issuing Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to individuals and entities, such as Bluescope Steel Limited, who wish to apply for tariff concessions on certain imported goods. The scope of the Act extends to ensuring that no substitutable goods are produced in Australia in the ordinary course of business before a TCO can be granted. The CEO is mandated to consider applications and determine if they meet the core criteria outlined in the Act, such as the absence of domestically produced substitutable goods. Geographically, the application of the Act is national, as it is a Commonwealth Act, thereby having jurisdiction across Australia. Any exclusions or exemptions are specified within the Act itself, particularly under section 269SJ, which lists goods that cannot be subject to a TCO. The Act may also extend its application through subordinate instruments, which provide further detail on the process and criteria for issuing TCOs.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0618987 are section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), and section 269P, which mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order declaring that the goods in question are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (section 269K(1)). The TCO in question, made under section 269P, was published on 2 March 2007 and declares that certain blast furnace parts are goods to which item 50 of Schedule 4 to the Tariff applies, meaning the duty on these goods is free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, any person who wishes to apply for a TCO must ensure their application is not in respect of goods specified in section 269SJ of the Act, which are ineligible for TCOs. The CEO, upon receiving a valid application, must decide whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit their views on why the TCO should not be made (section 269K(1)).
The Act also sets out the consequences of non-compliance with its provisions. However, the Explanatory Statement does not detail specific offences, penalties, or civil/criminal consequences for breach of the TCO provisions. It does mention that a TCO does not affect the rights of any person (other than the Commonwealth) in respect of anything done or omitted before the TCO’s registration date, and it does not impose any liabilities on any person. Importers of the affected goods can apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The TCO No. 0618987 came into force on the date the application was lodged, 27 November 2006 (subsection 269S(1)). This date also marks the commencement of the benefits for importers, who can apply for duty refunds on goods imported from that date. The CEO, having received no submissions against the TCO, was satisfied that the application met the core criteria, leading to the issuance of the TCO. This order has effectively reduced the customs duty on certain blast furnace parts from 5% to free, reflecting the Act’s intent to provide tariff concessions where appropriate.