EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619996
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 carbon mortars on 18 December 2006.
Instrument
TCO No 0619996 was made on 09 March 2007. It declares that those certain carbon mortars 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. 0619996 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for managing customs duties and includes provisions for Tariff Concession Orders (TCOs) that allow for reduced customs duties on certain goods. This was introduced to address the need for tariff relief on specific goods where no domestic substitutes are available, thereby facilitating trade and supporting industries that rely on imported raw materials. The explanatory statement for Tariff Concession Instrument No. 0619996 outlines the process for the CEO of Customs to assess and approve TCO applications. The objective is to ensure that the concession does not disadvantage existing rights or impose new liabilities on any person other than the Commonwealth, while providing beneficial impacts to importers by allowing duty refunds on goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0619996 under the Customs Act 1901 applies specifically to certain carbon mortars as identified in the application by Bluescope Steel Limited. The Act facilitates tariff concessions for goods not produced in Australia in the ordinary course of business, allowing for a reduced rate of customs duty or, as in this case, a tariff-free status. This applies to entities or individuals importing these specific goods, effectively reducing their customs duty obligations from 5% to free. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the application of the Customs Act 1901 across the Commonwealth. The application of the Act is not limited by state or territory boundaries but rather encompasses the entire nation. There are exclusions as outlined in section 269SJ of the Act, which details goods that cannot be subject to a tariff concession order, ensuring that the application process adheres to specific legislative criteria. The instrument extends its application through subordinate instruments, namely the Customs Tariff Act 1995, which specifies the applicable duty rates and tariff classifications.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0619996, outline the process and criteria for the application and issuance of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an application for a TCO to be made to the Chief Executive Officer of Customs (CEO), provided the goods in question do not fall under the exceptions listed in section 269SJ. The CEO must then assess whether the application meets the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). If these criteria are satisfied, the CEO is mandated to issue a written TCO (section 269P(3)). The instrument, TCO No. 0619996, declares that certain carbon mortars are subject to a TCO, with a resulting duty rate of free, as opposed to the general rate of 5% (Schedule 4, item 50 of the Customs Tariff Act 1995).
Under this Act, the CEO is obligated to assess applications for TCOs and determine whether they meet the core criteria. The CEO must also publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to submit their views on why the TCO should not proceed (subsection 269K(1)). The CEO's role is to ensure that the application process is transparent and that all relevant stakeholders have the opportunity to provide input. In the case of TCO No. 0619996, no submissions were received in response to the Gazette notice, and thus the TCO was issued.
The Act imposes specific obligations on the CEO in the process of issuing TCOs. Firstly, the CEO must ensure that the application is not for goods that are specified in section 269SJ of the Act, which are ineligible for a TCO. Secondly, the CEO must verify that the core criteria specified in section 269C are met, specifically confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Upon meeting these criteria, the CEO is required to issue a written TCO, as demonstrated in the case of TCO No. 0619996.
Regarding offences, penalties, or consequences for breach, the Customs Act 1901 does not specify particular criminal or civil penalties for non-compliance with the TCO provisions. However, any misuse of a TCO or fraudulent claims for tariff concessions could potentially lead to other legal consequences under different sections of the Act or related legislation, such as the Crimes Act 1914. The primary focus of the Act is on the administrative process and criteria for issuing TCOs rather than penalising non-compliance with the TCO framework itself.