EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704132
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 Ltd applied for a TCO in respect of certain blast furnace valves on 19 March 2007.
Instrument
TCO No 0704132 was made on 8 June 2007. It declares that those certain blast furnace valves 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 0%.
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. 0704132 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0704132, enacted in 2007 under the Customs Act 1901, addresses the issue of applying lower rates of customs duty on certain imported goods that have no substitutable domestic production. The instrument facilitates tariff concessions through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs, enabling importers to benefit from reduced duty rates on specific goods, provided that no similar goods are produced domestically. This legislative mechanism aims to support industries by mitigating the competitive disadvantage faced by imported goods, thus promoting fair trade practices and potentially stimulating economic activity.
The Customs Act 1901, enacted by the Australian Parliament, provides the legal framework for administering customs and excise, and the instrument was designed to ensure that the process of applying for and granting tariff concessions is transparent and accessible. The policy objective behind this instrument is to ensure that Australian industries are not unduly burdened by high import duties on goods that cannot be produced locally, thereby encouraging competitive imports and supporting broader economic objectives.
Scope and Application
The Customs Act 1901 applies to any person or entity involved in the importation or exportation of goods, particularly those seeking tariff concessions on imported goods. This Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods, provided certain criteria are met. These criteria include ensuring that no substitutable goods are produced in Australia on the day the application for the tariff concession is lodged. The Act has a national jurisdictional reach across Australia, as it is a Commonwealth Act. It does not affect any pre-existing rights or liabilities of individuals or entities other than the Commonwealth. The Explanatory Statement for Tariff Concession Instrument No. 0704132 indicates that Bluescope Steel Ltd successfully applied for a TCO concerning certain blast furnace valves, resulting in a duty rate reduction from 5% to 0%. The application process and subsequent TCO were conducted in accordance with the statutory requirements and no submissions were received in opposition to the concession. The TCO’s effective date aligns with the date the application was lodged, and it allows for the refund of duties paid on the specified goods imported from that date forward.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P, and 269SJ of the Customs Act 1901, which establish the criteria for making Tariff Concession Orders (TCOs) and the types of goods that cannot be subject to a TCO. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written order declaring the goods in question are subject to a specified rate of customs duty. Section 269SJ excludes certain goods from being subject to a TCO.
The Act imposes several obligations on the parties involved. Firstly, it requires applicants, such as Bluescope Steel Ltd, to apply for a TCO and provide sufficient information to meet the core criteria as outlined in section 269C. The CEO is obligated to review the application, determine whether it meets the core criteria, and make a decision within the stipulated timeframe. Upon making a TCO, the CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not proceed. This ensures transparency and allows for public input before the order is finalized.
In terms of penalties and consequences, the Act does not explicitly state any criminal or civil penalties for breaches related to TCOs. However, the consequences of non-compliance could include the invalidation of the TCO or the imposition of the general rate of duty on the goods in question. For instance, if it were discovered that substitutable goods were produced in Australia after the TCO was made, the TCO could potentially be revoked, and the higher duty rate would apply. Additionally, any party adversely affected by a TCO could seek judicial review, although this would be subject to the specific provisions of the Administrative Decisions (Judicial Review) Act 1977.