EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703438
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 blast furnace gas scrubber parts on 02 March 2007.
Instrument
TCO No 0703438 was made on 25 May 2007. It declares that those certain blast furnace gas scrubber parts 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 10%. 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. 0703438 is taken to have come into force on 02 March 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, establishes a framework for the administration of customs and excise duties, and it includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders are intended to provide relief from customs duties on imported goods under certain conditions. The instrument F2007L01650, Tariff Concession Instrument No. 0703438, was introduced to address the specific need for tariff concessions on certain blast furnace gas scrubber parts applied for by Bluescope Steel Limited. The CEO of Customs determined that these parts were not substitutable by any goods produced in Australia, thereby meeting the core criteria for a tariff concession. The primary policy objective of this legislation is to facilitate the importation of goods that are not produced domestically and to ensure that the rights and interests of importers are protected, without imposing any new liabilities on them.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which applies to entities and individuals seeking reduced customs duty rates for particular goods. This Act operates within the Commonwealth jurisdiction, extending its reach to any party applying for a TCO concerning goods not specified in section 269SJ of the Act, which details goods ineligible for tariff concessions. The TCOs are effective from the date an application is lodged, as per subsection 269S(1) of the Act, and do not retroactively affect the rights of any person other than the Commonwealth, ensuring that no prior liabilities or disadvantages are imposed on non-Commonwealth entities or individuals. Additionally, the Act mandates the publication of TCO applications in the Gazette to allow for any submissions opposing the concession, although in the case of TCO No. 0703438, no such submissions were received. This legislative framework, thus, provides a structured process for tariff reductions while safeguarding the interests of all stakeholders involved.
Key Provisions
The Tariff Concession Instrument No. 0703438 under the Customs Act 1901, provides the legal basis for tariff concessions on certain goods. Specifically, section 269F (3) of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning goods. If the CEO determines that the application complies with the core criteria (section 269C), a TCO is made, granting a lower rate of customs duty on the specified goods. In this case, Instrument TCO No. 0703438 was issued on 25 May 2007, providing a free rate of duty on blast furnace gas scrubber parts, previously subject to a general duty rate of 10%.
The Act imposes certain obligations on both applicants and the CEO in the TCO process. An applicant must submit a valid application (section 269F) that does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. The CEO is obligated to assess the application against the core criteria (section 269C), which includes verifying that no substitutable goods were produced in Australia at the time of application. Additionally, the CEO must publish a notice in the Gazette (section 269K) inviting any interested parties to submit submissions opposing the TCO. In this instance, no submissions were received.
Failing to comply with the requirements set out in the Customs Act 1901 may result in legal consequences. There are no specific offences mentioned in the Explanatory Statement, but non-compliance with the Act's provisions could lead to civil or criminal liability. For example, providing false information in a TCO application could potentially result in a civil penalty of up to $22,200 for an individual or $111,000 for a corporation, under section 300-5 of the Criminal Code Act 1995. Similarly, failure to declare goods correctly or pay the appropriate duty could result in criminal charges and penalties under the Customs Act. However, the specific penalties for breach of the TCO provisions are not detailed in the Explanatory Statement.