EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708872
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 cold water slag granulator parts on 13 June 2007.
Instrument
TCO No 0708872 was made on 24 August 2007. It declares that those certain cold water slag granulator 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. 0708872 is taken to have come into force on 13 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 Australian Parliament, provides a framework for the imposition of customs duties on imported goods. In particular, Part XVA of the Act establishes a process for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The primary problem or gap this part of the Act addresses is the facilitation of the importation of goods for which no substitutable Australian-produced equivalent exists, by granting tariff concessions that reduce the customs duty payable on these specific goods. The Explanatory Statement for Tariff Concession Instrument No. 0708872, made under this Act, details the process and criteria for the application and granting of a TCO, and illustrates the application of these provisions through the specific case of Bluescope Steel Limited’s application for a tariff concession on certain cold water slag granulator parts. The policy objective is to support Australian industries by ensuring that tariff concessions are granted in a manner that does not disadvantage existing importers or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0708872, made under the Customs Act 1901, pertains to the application of tariff concessions on certain cold water slag granulator parts, reducing their duty rate to free. This legislation applies to Bluescope Steel Limited and potentially other entities seeking tariff concessions for goods not produced in Australia and for which no substitutable goods exist domestically. The Act's scope extends to the Commonwealth jurisdiction, applying to all entities importing the specified goods into Australia. The application of the Act is contingent upon satisfying the core criteria, which include the non-existence of substitutable goods produced in Australia on the date the application was lodged. The Act does not specify any exclusions or exemptions beyond those outlined in section 269SJ of the Customs Act 1901, which already excludes certain goods from tariff concession eligibility. The Act’s application may be extended or modified through subordinate instruments, aligning with the broader customs and tariff regulations.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0708872, under the Customs Act 1901, are primarily concerned with the application and implementation of Tariff Concession Orders (TCOs) for specific goods. Section 269F (3) allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods in question 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 section 269C, they must make a written order, a TCO, specifying the applicable prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this particular case, Instrument TCO No. 0708872, made on 24 August 2007, declared that certain cold water slag granulator parts would be subject to a zero duty rate instead of the general 5% duty, effective from 13 June 2007.
The obligations imposed by the Act on the parties involved are significant. The CEO must ensure that the application for a TCO meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed. Although no submissions were received in this case, the CEO is mandated to consider any objections raised. The Act ensures that the rights of any person, other than the Commonwealth, will not be adversely affected by the TCO if they were established before the date of registration. Importers, however, stand to benefit from this TCO as they can apply for a refund of duty paid on the specified goods imported since the date the TCO came into force.
The Act also outlines potential consequences for breaches of the provisions or regulations. While specific penalties for non-compliance with TCO provisions are not detailed in the explanatory statement, general provisions of the Customs Act 1901 and related regulations would apply. These may include fines and imprisonment for offences such as fraud, smuggling, or incorrect declarations. For example, knowingly making a false statement or providing misleading information in an application for a TCO could result in criminal penalties under section 269K(3) of the Act, which may include fines or imprisonment. Additionally, civil penalties may apply for breaches of the Act or related regulations, which could include substantial fines depending on the severity of the breach. The specific penalties would be determined by the relevant courts based on the circumstances of each case.