EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619682
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 refractory bricks and/or shapes on 12 December 2006.
Instrument
TCO No 0619682 was made on 09 March 2007. It declares that those certain blast furnace 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 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. 0619682 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, introduced a framework to facilitate tariff concession orders (TCOs) through which the Chief Executive Officer of Customs could grant lower rates of customs duty on specific goods. This was achieved by allowing applications for TCOs under section 269F of the Act, provided that the goods in question did not fall under the prohibited categories outlined in section 269SJ. The core criteria for approving a TCO application, as stipulated in section 269C, required that no substitutable goods were produced in Australia at the time the application was lodged. This measure aimed to support industries by reducing the cost of imported materials necessary for production, thus fostering economic growth and competitiveness. Tariff Concession Instrument No. 0619682, issued on 9 March 2007, exemplifies this process by granting a tariff concession for certain blast furnace refractory bricks and shapes, effectively setting their duty rate at free, whereas the general duty rate is 5%.
Scope and Application
The Tariff Concession Instrument No. 0619682, issued under the Customs Act 1901, applies to entities such as Bluescope Steel Limited that have applied for tariff concessions on specific goods, in this case, certain blast furnace refractory bricks and/or shapes. The Act operates within the Commonwealth jurisdiction and allows for the reduction or exemption of customs duty on goods provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The instrument declares that these particular refractory bricks and shapes are subject to a zero duty rate under item 50 of Schedule 4 of the Customs Tariff Act 1995, as opposed to the general duty rate of 5%. The scope of the application extends to the date the application was lodged, 12 December 2006, and the instrument came into effect on that date. The application process requires consultation with interested parties, though in this instance, no submissions were received. The instrument also ensures that it does not disadvantage or impose liabilities on any person other than the Commonwealth, thereby safeguarding the rights of importers who may apply for duty refunds for imports made since the effective date of the tariff concession.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application for a Tariff Concession Order (TCO) to be made by any person seeking a lower rate of customs duty on certain goods. The Chief Executive Officer of Customs (CEO) evaluates these applications to determine if they meet the core criteria as outlined in section 269C of the Act. For the application to meet the core criteria, it must be established that on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F. Once the CEO determines that the application satisfies these criteria, they must issue a written order, which is the TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations imposed on the parties involved by this Act are primarily on the CEO. The CEO is required to ensure that any TCO application made is evaluated against the core criteria specified in the Act. This includes considering whether any substitutable goods are being produced in Australia and publishing a notice in the Gazette as soon as practicable after accepting a TCO application as valid. The notice must invite any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. Additionally, the CEO must decide on the application and issue a written order if the core criteria are met.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can result in various consequences. Although the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences, it is implied that non-compliance with the Act could lead to legal action. The Act, however, ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, meaning that any liabilities imposed would be limited to those within the scope of the Act. Importers of the goods subject to the TCO may be able to apply for a refund of duty on goods imported since the TCO came into force, highlighting the potential financial benefits and obligations under the legislation.