EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619997
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 ramming mixes on 18 December 2006.
Instrument
TCO No 0619997 was made on 09 March 2007. It declares that those certain carbon ramming mixes 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. 0619997 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 was enacted by the Australian Parliament to provide for the regulation of customs and excise duties, among other things. The Act was introduced to address the need for a structured approach to the imposition and collection of customs duties, and to facilitate international trade. The explanatory statement relates specifically to Tariff Concession Orders (TCOs) under Part XVA of the Act, which allow for the reduction or exemption of customs duty on certain goods. This was introduced to address the problem of ensuring that Australian industries can access necessary materials at a competitive price, thereby fostering economic growth and competitiveness. The Tariff Concession Instrument No. 0619997 was made by the Chief Executive Officer of Customs on 9 March 2007, following an application by Bluescope Steel Limited for a TCO on certain carbon ramming mixes, declaring these goods exempt from the general rate of duty. The policy objective was to ensure that such goods, which are not produced in Australia, are accessible at no customs duty, thus aiding the applicant's operations without imposing additional costs on the Australian economy.
Scope and Application
The Tariff Concession Instrument No. 0619997 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain carbon ramming mixes, as determined by the Chief Executive Officer (CEO) of Customs. This legislation targets entities or individuals involved in the importation of these specific goods, offering them tariff concessions by reducing the customs duty rate to free from the general rate of 5%. The application of the Act is limited to the goods specified in the Instrument and excludes any goods that are listed in section 269SJ of the Customs Act 1901 as ineligible for tariff concessions. The Act operates on a Commonwealth level and its scope is confined to the goods mentioned in the Instrument, without extending to any other goods or industries unless specified through subordinate instruments. The commencement date of the Instrument is effectively the date of the application for the tariff concession order, which in this case was 18 December 2006. The rights and liabilities of persons other than the Commonwealth are not affected by this Instrument, ensuring no disadvantage or imposition of liabilities for actions taken prior to the registration date.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0619997, as outlined in the Customs Act 1901, primarily focus on the process and conditions for granting tariff concession orders (TCOs). According to section 269F, a person may apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and does not pertain to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must then determine if the application meets the core criteria stipulated in section 269C. This core criterion is satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269B provides definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods."
The obligations imposed by the Act on the CEO include ensuring that the TCO application complies with the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, as per subsection 269P(3), the CEO must issue a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Furthermore, under subsection 269K(1), the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be granted. In this instance, the CEO did not receive any submissions in response to this invitation.
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences or penalties for breaches related to TCOs. However, it is implicit that any improper application or misuse of a TCO could result in legal scrutiny and potential administrative actions. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO. For instance, under paragraph 126(1)(r) of the Regulations, importers of such goods can apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force. Importantly, the TCO does not impose any liabilities on any person.