EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619681
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 12 December 2006.
Instrument
TCO No 0619681 was made on 9 March 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. 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. 0619681 is taken to have come into force on 12 December 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, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0619681 was introduced to address the specific issue of granting tariff concessions on certain goods that are not substitutable by Australian-produced goods. This was achieved by allowing the Chief Executive Officer of Customs to make written orders that apply lower rates of customs duty to these specified goods. In this particular case, the Instrument No. 0619681, made on 9 March 2007, was enacted in response to an application by Bluescope Steel Ltd for tariff concessions on certain refractory bricks and shapes, effectively reducing the duty rate from 5% to 0%. The policy objective underpinning this legislation is to facilitate trade by providing tariff relief where Australian production of substitutable goods does not exist, thereby encouraging the importation of these goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which the Chief Executive Officer (CEO) of Customs can issue. This legislation applies to any person who seeks to import goods that are eligible for a reduced rate of customs duty under a TCO. The Act applies to entities and individuals involved in the importation of goods that meet the criteria for a TCO, which typically includes goods for which there are no substitutable products manufactured in Australia. The geographic reach of the Act is national, applying across the Commonwealth of Australia. The application of the TCO does not extend to goods specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. The Act's application can be extended or restricted through subordinate instruments, which allow for detailed specifications and exceptions as necessary. In the specific case of Tariff Concession Instrument No. 0619681, the CEO determined that no substitutable goods were produced in Australia for certain refractory bricks and/or shapes, thereby satisfying the core criteria for a TCO and allowing for a zero per cent duty rate on these goods.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0619681 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria (section 269C), they are required to make a TCO (section 269P(3)). The CEO must ensure that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This TCO declares that the specified goods are subject to a prescribed tariff rate (section 269P(3)), in this case reducing the duty on certain refractory bricks and shapes from 5% to 0%.
The obligations and requirements imposed by the Act on parties or entities it governs include the necessity for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)). The notice must include an invitation for any person to lodge a submission if they believe there are reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions. The TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the registration date. Importers of the goods affected by the TCO may apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
The Act includes provisions for offences, penalties, or civil/criminal consequences for breaches. However, the Explanatory Statement does not specify any maximum penalties for breaches of the TCO or the Customs Act 1901 in this context. It is implied that any breaches of the Act or the TCO would be subject to the general legal consequences and penalties outlined in the Act and relevant regulations.