EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700861
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 blankets on 16 January 2007.
Instrument
TCO No 0700861 was made on 13 April 2007. It declares that those certain refractory blankets 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. 0700861 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, enacted by the Australian Parliament, includes provisions for the application of Tariff Concession Orders (TCOs) to reduce the customs duty on certain goods. This legislation was introduced to address the issue of ensuring fair trade practices by providing a mechanism for businesses to apply for reduced customs duties on goods that are not produced domestically, thereby encouraging imports and potentially lowering consumer prices. The Tariff Concession Instrument No. 0700861 was made under this Act on 13 April 2007, following an application by Bluescope Steel Limited for tariff concessions on refractory blankets. The policy objective of this instrument, as outlined in the explanatory statement, is to ensure that no substitutable goods are produced in Australia, thereby justifying the tariff concession and benefiting importers by allowing them to apply for duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the granting of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislation applies to any person or entity that submits an application for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which excludes certain goods from the scheme. The application process mandates that the CEO must be satisfied that the goods in question are not substitutable by goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The TCO scheme is national in scope, applying across Australia as a Commonwealth legislation, and extends its reach through subordinate instruments such as the Customs Tariff Act 1995. In the case of TCO No. 0700861, the instrument applies to certain refractory blankets and specifies the conditions under which these goods are exempt from the general customs duty rate of 5%, making them duty-free. The TCO does not retroactively affect any pre-existing rights or liabilities of individuals or entities, ensuring that only future transactions are governed by the concessions provided.
Key Provisions
The Customs Act 1901 (the Act) sets up a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA, allowing for lower customs duty rates on specified goods. Section 269F outlines the application process for a TCO, where an individual may apply to the Chief Executive Officer (CEO) of Customs. The CEO must assess whether the application complies with the core criteria specified in section 269C, which includes ensuring no substitutable goods are produced in Australia at the time of application. If the application meets these criteria, the CEO is required to issue a written TCO, as stipulated in section 269P(3), declaring the goods subject to a prescribed rate of duty outlined in the Customs Tariff Act 1995.
The obligations imposed by the Act on applicants and the CEO are clearly defined. Section 269K mandates that the CEO must publish a notice in the Gazette after accepting a valid TCO application, inviting submissions from any interested parties. If no objections are received, the CEO proceeds to issue the TCO. The CEO's role includes ensuring that the goods specified in the TCO application do not have substitutable alternatives produced domestically, which is a fundamental criterion for the concession. Additionally, section 269S stipulates that a TCO takes effect from the date the application is lodged, ensuring timely implementation of the concession.
Failure to comply with the provisions of the Act can lead to significant legal consequences. While the explanatory statement does not explicitly detail offences or penalties, breaches of the Customs Act can result in both civil and criminal penalties. For instance, providing false information in an application could lead to prosecution under the Act, with penalties including fines and imprisonment. The precise penalties depend on the nature and severity of the offence, but they underscore the importance of adherence to the statutory requirements.
In summary, the Act and the TCO process provide a structured approach to granting tariff concessions, ensuring that the application process is transparent and fair. The obligations on both applicants and the CEO are designed to uphold the integrity of the process, while the potential legal consequences serve as a deterrent against non-compliance. The rights of importers are protected, and the TCO does not impose any liabilities on any person, ensuring that the scheme operates within a legally sound framework.