EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704714
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 valve parts on 28 March 2007.
Instrument
TCO No 0704714 was made on 15 June 2007. It declares that those certain blast furnace valve 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 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. 0704714 is taken to have come into force on 28 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. 0704714 was enacted in 2007 under the Customs Act 1901 to address the issue of providing tariff concessions for certain goods, in this case blast furnace valve parts, that are not produced domestically in the ordinary course of business. The instrument was introduced to alleviate the financial burden on importers by reducing the customs duty from 5% to 0% for these specific goods, as long as they were not substitutable by Australian-made alternatives. This measure was enacted by the Chief Executive Officer of Customs following an application by Bluescope Steel Ltd, and it came into force on the date the application was lodged, 28 March 2007. The policy objective, as outlined in the explanatory statement, is to support the importation of goods where no substitutable domestic products exist, thereby encouraging trade and potentially reducing costs for importers.
Scope and Application
The Tariff Concession Instrument No. 0704714 under the Customs Act 1901 applies to specific goods for which an application has been made by an entity seeking a tariff concession. This Act is a Commonwealth instrument and thus applies nationally across Australia. The instrument was made in response to an application by Bluescope Steel Ltd for a tariff concession order (TCO) regarding certain blast furnace valve parts. The scope of this legislation is to provide a lower rate of customs duty on these specified goods, contingent on the application meeting the core criteria set out in the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The instrument does not apply to goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The instrument does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration.
Key Provisions
Section 269F of the Customs Act 1901 allows for applications to be made to the Chief Executive Officer of Customs (CEO) for Tariff Concession Orders (TCO) in respect of specific goods. A TCO application can be made if the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in sections 269B and 269C, a TCO is made, which applies a lower rate of customs duty to the goods in question. For Bluescope Steel Ltd, this involved certain blast furnace valve parts, where the TCO reduced the duty rate from 5% to 0%. This tariff concession was declared effective from 28 March 2007, the date the application was lodged.
The obligations imposed by the Act on the CEO and applicants include ensuring that the application does not concern goods that are ineligible under section 269SJ, and verifying that the core criteria are met. Section 269C specifies that the application must demonstrate that no substitutable goods are produced in Australia. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. In this instance, no submissions were received, allowing the process to proceed without objection.
Failing to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act generally carry civil and criminal penalties as outlined in other sections of the Act. Such penalties could include fines or imprisonment, depending on the severity of the breach. However, for the purposes of TCO No. 0704714, the explanatory statement clarifies that the rights of persons other than the Commonwealth are not adversely affected, and no liabilities are imposed on anyone as a result of the TCO.