EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702855
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 (AIS) Pty Ltd applied for a TCO in respect of certain blast furnace combustion air fans on 23 February 2007.
Instrument
TCO No 0702855 was made on 18 May 2007. It declares that those certain blast furnace combustion air fans 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. 0702855 is taken to have come into force on 23 February 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 Tariff Concession Instrument No. 0702855, enacted in 2007 under the Customs Act 1901, was introduced to address the issue of providing tariff concessions for specific goods that are not produced in Australia and have no substitutable domestic products. This instrument was developed to facilitate trade by reducing customs duties on particular imports, thus encouraging their availability in the Australian market. The instrument was issued by the Chief Executive Officer of Customs following an application by Bluescope Steel (AIS) Pty Ltd for tariff concessions on certain blast furnace combustion air fans. The process for creating this instrument involved satisfying the core criteria set out in the Customs Act, which includes verifying that no substitutable goods were produced in Australia at the time of the application. This measure not only promotes economic efficiency by allowing lower-cost imports but also ensures that Australian consumers and businesses can access a broader range of goods at reduced prices.
Scope and Application
The Tariff Concession Instrument No. 0702855 under the Customs Act 1901 applies to individuals or entities that seek a concession on the customs duty for specific imported goods. In this instance, the instrument concerns an application by Bluescope Steel (AIS) Pty Ltd for a Tariff Concession Order (TCO) on certain blast furnace combustion air fans. The Act allows the Chief Executive Officer of Customs to make such orders if certain conditions are met, including that no substitutable goods are produced in Australia in the ordinary course of business. This particular TCO, which came into force on 23 February 2007, grants a duty-free rate for the specified blast furnace combustion air fans, reducing the duty from 5% to free. The application of the TCO is national, affecting importers across Australia, and does not disadvantage any person by imposing liabilities for actions taken before the TCO's effective date. The Act's provisions enable the CEO to extend or restrict the application of TCOs through subordinate instruments, ensuring flexibility in addressing various trade scenarios.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0702855 under the Customs Act 1901 (section 269C) establish a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on certain goods. Specifically, this instrument concerns the concession of customs duty on certain blast furnace combustion air fans. The instrument was made on 18 May 2007, following an application by Bluescope Steel (AIS) Pty Ltd on 23 February 2007. The CEO granted the concession as no substitutable goods were produced in Australia at the time of the application, meeting the criteria set out in section 269P(3). The general rate of duty for these goods is 5%, but the tariff concession reduces this rate to free, under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved are primarily centred around the application and approval process for tariff concessions. The applicant must ensure that their application is valid and meets the core criteria set out in section 269C. The CEO must then assess the application, and if satisfied, make a written order declaring the goods eligible for the tariff concession. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the concession should not be granted, as outlined in subsection 269K(1). In this case, no submissions were received, leading to the approval of the tariff concession.
In terms of legal consequences, section 269S(1) of the Customs Act 1901 stipulates that the tariff concession is effective from the date the application was lodged, which in this instance is 23 February 2007. This means that any duties imposed on the specified goods from this date onward are waived. Furthermore, the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the concession came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the Act ensures that the tariff concession does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the concession was registered.