EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700860
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 refractory ropes on 16 January 2007.
Instrument
TCO No 0700860 was made on 10 April 2007. It declares that those certain refractory ropes 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. 0700860 is taken to have come into force on 16 January 2007.
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 Parliament of Australia to regulate the importation and exportation of goods and manage customs duties. This legislation provides a framework for the administration of customs and excise duties, including the imposition of tariffs on imported goods. The Act was introduced to address the need for a structured approach to managing customs duties and ensuring compliance with international trade obligations. One significant feature of the Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on certain goods. This mechanism was established to support industries by reducing the cost of imported goods that do not have Australian alternatives, thereby fostering economic growth and competitiveness. The policy objective is to provide relief to industries that rely on importing specific goods for which there are no substitutable Australian-produced alternatives, while still maintaining the overall revenue from customs duties.
Scope and Application
The Tariff Concession Instrument No. 0700860 under the Customs Act 1901 applies specifically to entities or individuals who apply for and are granted Tariff Concession Orders (TCOs) for certain goods. The primary focus of this Act is on the concession of customs duty rates for goods that are not substitutable by goods produced in Australia. This applies to the person or entity that submits the application, such as Bluescope Steel Limited in this instance, and the goods in question, which are certain refractory ropes. The Act's jurisdiction extends nationally as it is a Commonwealth Act, applying across all states and territories of Australia. The application of this Act is limited by the exclusion of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. Additionally, the Act provides for the CEO of Customs to make subordinate instruments that may extend or restrict the application of the TCOs, although in this specific case, no such instruments have been mentioned. The commencement of the TCO is effective from the date the application was lodged, thereby ensuring that the rights of importers are beneficially affected from that date, including the ability to apply for a refund of duty on goods imported since the effective date.
Key Provisions
Section 269F of the Customs Act 1901 allows for the application of Tariff Concession Orders (TCOs) by any person, with the Chief Executive Officer of Customs (CEO) having the authority to decide whether these applications meet the core criteria (s. 269C). If the CEO determines that the application is valid and meets the criteria, a TCO can be issued, which effectively reduces the customs duty rate for the specified goods. For example, in Instrument TCO No. 0700860, the CEO made an order on 10 April 2007, declaring that certain refractory ropes are subject to a TCO, thereby setting their duty rate at free instead of the general rate of 5% (s. 269P(3)).
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure that their application is valid and meets the core criteria, particularly that no substitutable goods are produced in Australia (s. 269C). The CEO, on the other hand, is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made (s. 269K(1)). In the case of TCO No. 0700860, no submissions were received in response to the published notice.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO could result in various consequences. While the explanatory statement does not explicitly detail offences or penalties, breaches of customs regulations generally attract both civil and criminal penalties. Civil penalties can include fines and recovery of unpaid duties, while criminal penalties may include imprisonment, reflecting the seriousness with which the law treats non-compliance. The exact penalties depend on the nature and severity of the breach, as outlined in other relevant sections of the Act and associated regulations.