EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708375
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 parts on 04 June 2007.
Instrument
TCO No 0708375 was made on 17 August 2007. It declares that those certain blast furnace 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 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. 0708375 is taken to have come into force on 04 June 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 Parliament of Australia, established a framework for the imposition of customs duties on imported goods. This Act facilitates the application for tariff concession orders, which provide for reduced or waived customs duties on certain goods. One such order, Tariff Concession Instrument No. 0708375, was introduced in 2007 to address the specific needs of certain industries by providing tariff relief on blast furnace parts. The instrument was enacted to ensure that no substitutable goods were produced in Australia, thereby justifying the tariff concession and providing economic benefits to importers of these goods. The policy objective is to support Australian industries by reducing the cost of importing critical components, thus enhancing competitiveness without imposing new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking tariff concessions for goods imported into Australia. The scope of the Act is limited to goods that are not specified in section 269SJ, which includes certain goods such as tobacco products, dutiable liquor, and goods that are of a kind specified in the Excise Tariff Act 1921. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. Once the CEO is satisfied that the application meets the core criteria, a TCO is issued, effectively reducing or eliminating the duty on the specified goods. The instrument, TCO No. 0708375, exemplifies this process by granting a tariff concession on certain blast furnace parts, lowering the duty rate from 5% to free. The TCO mechanism extends its application nationally, impacting the rights of importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. However, it does not impose any liabilities on any person and does not disadvantage or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration of the TCO.
Key Provisions
The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs) under section 269F, which allow for a lower rate of customs duty on certain goods, as specified in section 269P. For instance, TCO No. 0708375 applies to certain blast furnace parts, reducing the general duty rate of 5% to free of charge (section 269P(3)). This concession applies from the date the application for the TCO was lodged, in this case, 04 June 2007 (subsection 269S(1)).
The Act imposes certain obligations on the Chief Executive Officer of Customs (CEO) when processing TCO applications. The CEO must first ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO must make a written TCO order as per section 269P(3).
Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In the case of TCO No. 0708375, no such submissions were received. Additionally, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(2)).
The Customs Act 1901 does not explicitly state penalties for breach of the provisions related to TCOs. However, failure to comply with the conditions or obligations set out in the Act, such as providing false information in an application, could potentially lead to civil or criminal consequences under other sections of the Act. For instance, knowingly making a false statement in a document required by the Act could result in a civil penalty of up to $22,200 for individuals and $111,000 for corporations (subsection 265-5(1) of the Crimes Act 1914). Criminal penalties could also apply for more serious breaches.