EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711885
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 23 July 2007.
Instrument
TCO No 0711885 was made on 02 October 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. 0711885 is taken to have come into force on 23 July 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. 0711885, enacted in 2007 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods that are not produced in Australia, thereby ensuring a fair trade environment and supporting Australian industry. This instrument was established to provide relief to importers of goods that face higher customs duty rates due to the absence of domestic production. The enacting body responsible for this legislation is the Australian Parliament, with the policy objective being to facilitate trade by reducing customs duty on certain imported goods, thus making them more competitive in the domestic market.
The instrument was created in response to an application by Bluescope Steel Limited for tariff concessions on certain blast furnace parts, which are crucial for steel manufacturing. The Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia, allowing the CEO to declare that these parts are subject to a lower rate of customs duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. This concession benefits importers by potentially lowering their costs and making imported goods more affordable, while also supporting the broader economic objectives of the Customs Act.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply a lower rate of customs duty on certain goods. This provision applies to any person or entity that applies for a TCO in respect of goods that are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The Act ensures that a TCO application will be considered if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, applying across all jurisdictions in Australia. Subordinate instruments may further extend or restrict the application of this Act, but no specific exclusions or exemptions are noted in the given explanatory statement. The application of TCO No. 0711885, which was made on 2 October 2007 for certain blast furnace parts, exemplifies the process where, upon satisfaction of the core criteria, the CEO issues a written order granting tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901, specifically as applied to Tariff Concession Orders (TCOs), establish a framework that allows the Chief Executive Officer (CEO) of Customs to implement lower rates of customs duty on certain goods. Under section 269F, an individual or entity can apply to the CEO for a TCO. The CEO must then assess whether the application meets the core criteria outlined in section 269C, which stipulates that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied with the application and it does not pertain to goods excluded by section 269SJ, they must issue a written order (the TCO) specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, section 269K(1) mandates that the CEO must publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to submit objections. The CEO's duty to consult ensures transparency and fairness in the process. In this instance, no submissions were received, indicating that the application met the necessary criteria without any opposition. Furthermore, section 269S(1) outlines that the TCO takes effect from the day the application is lodged, which in this case was 23 July 2007. The TCO does not retroactively affect any pre-existing rights or liabilities of parties other than the Commonwealth, thereby protecting those who have already engaged in import activities before the concession was applied.
The Customs Act 1901 also delineates consequences for breaches of its provisions. While the explanatory statement does not detail specific offences or penalties under this particular TCO, the Act generally provides for both civil and criminal penalties for non-compliance. For instance, section 278 allows for fines and imprisonment for knowingly making false statements or representations in relation to customs matters. Additionally, section 279 imposes penalties for evading customs duty or otherwise contravening the Act. The penalties can vary significantly, with maximum fines and imprisonment terms applicable depending on the severity of the offence. Therefore, while the specific penalties for breaches related to TCOs are not explicitly stated, the overarching framework of the Customs Act ensures that any violations are met with appropriate legal repercussions.