EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619972
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 18 December 2006.
Instrument
TCO No 0619972 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. 0619972 is taken to have come into force on 18 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 Tariff Concession Instrument No. 0619972 was enacted in 2007 as an instrument under the Customs Act 1901. This legislation was introduced to address the need for tariff concessions on specific goods, providing relief from customs duty for those who import certain types of goods that are not produced domestically. The Customs Act 1901 allows for the Chief Executive Officer of Customs to make Tariff Concession Orders, reducing the rate of customs duty on eligible goods when no substitutable goods are produced in Australia. The policy objective of this instrument is to support importers by reducing the cost of certain imported goods, thereby potentially stimulating trade and economic activity.
The instrument was developed following an application by Bluescope Steel Limited for tariff concessions on certain blast furnace refractory bricks and/or shapes. The Chief Executive Officer of Customs, satisfied that no substitutable goods were produced in Australia and following a period for public submissions with none received, declared that these goods would be subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument came into effect on the date of the application, 18 December 2006, and does not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 0619972, pertains to the application and establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to entities and individuals seeking to import specific goods that are not produced domestically and are eligible for reduced customs duty rates. The instrument in question specifically addresses an application by Bluescope Steel Limited for blast furnace refractory bricks and shapes, which were granted a tariff concession resulting in the duty rate being reduced from 5% to free. The application of the Act is national in scope, governed under the Commonwealth, and it extends to any entity that imports goods subject to the Customs Act. However, it excludes goods specified in section 269SJ of the Act that are ineligible for tariff concessions. The Act also provides for the CEO to make decisions based on subordinate instruments and regulations, ensuring that the application process for TCOs is both transparent and inclusive of public submissions, although in this case, no submissions were received. The commencement of this particular TCO is effective from the date the application was lodged, with no retroactive impact on existing liabilities or rights.
Key Provisions
The Customs Act 1901, particularly Part XVA, outlines the procedure for making Tariff Concession Orders (TCOs) which allow for lower customs duties on specific goods. Section 269F of the Act allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in relation to certain goods. If the CEO determines that the application pertains to goods that are not excluded under section 269SJ and meets the core criteria set out in section 269C, they are required to issue a TCO. This core criteria is met if, on the date the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions for key terms like 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are provided in sections 269D, 269E, and 269P(3) respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Under this Act, entities such as Bluescope Steel Limited can apply for a TCO for specific goods, as demonstrated by their application on 18 December 2006 for blast furnace refractory bricks and/or shapes. The CEO issued TCO No. 0619972 on 9 March 2007, declaring that these goods are subject to a free rate of duty, down from the general rate of 5%. As part of the process, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. In this case, no submissions were received. The TCO is considered to have come into force on the date the application was lodged, which in this instance was 18 December 2006.
The obligations imposed by the Act extend to the CEO ensuring that the application process for TCOs is transparent and fair. They must carefully assess each application against the core criteria and publish notices to allow for any objections. For applicants like Bluescope Steel Limited, the process requires them to demonstrate that no substitutable goods are produced in Australia. Additionally, importers of the specified goods can apply for a refund of duties paid since the TCO came into effect under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person except the Commonwealth and does not impose any liabilities on any person for actions taken before the TCO was registered.
The Act does not explicitly outline specific offences, penalties, or consequences for breach of its provisions concerning TCOs. However, the CEO’s failure to comply with the statutory requirements could potentially lead to legal challenges, administrative reviews, or other remedies available under the Administrative Appeals Tribunal Act 1975. There are no maximum penalties specified in the Act for breaches related to TCOs, but any resultant legal actions would be governed by the general principles of administrative law and the applicable statutory framework.