EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714633
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 (AIS) Pty Ltd applied for a TCO in respect of certain steel coil tongs parts on 07 September 2007.
Instrument
TCO No 0714633 was made on 16 November 2007. It declares that those certain steel coil tongs 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. 0714633 is taken to have come into force on 07 September 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, establishes a framework within which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to apply lower rates of customs duty on specified goods. This legislation was introduced to address the need for economic relief and trade facilitation by allowing duty-free or reduced-duty imports for goods where no Australian-made alternatives are available. In accordance with the policy objective outlined in the Act, Tariff Concession Instrument No. 0714633 was issued on 16 November 2007, following an application by Bluescope Steel (AIS) Pty Ltd for tariff concessions on certain steel coil tongs parts. The instrument declares these goods to be subject to a zero percent duty rate, effective from the date of application submission on 7 September 2007, with no submissions opposing the order received by the CEO.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0714633, applies to entities or individuals seeking tariff concessions on imported goods, particularly in this case to Bluescope Steel (AIS) Pty Ltd, who applied for concessions on certain steel coil tongs parts. The 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 these goods are not those explicitly excluded by section 269SJ of the Act and the application meets the core criteria set out in section 269C. The geographic reach of this legislation is national, applying across Australia and governed by the Commonwealth. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons for actions taken before the order's registration. The instrument extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the prescribed tariff rates.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on specified goods. When a person applies for a TCO under section 269F, the CEO assesses whether the application meets the core criteria stipulated in section 269C. This assessment hinges on whether, on the application date, there are no substitutable goods produced in Australia in the ordinary course of business. If the CEO finds that the application meets these criteria, they are required under section 269P(3) to issue a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
Entities governed by the Act must ensure their applications for TCOs are made with the necessary evidence and justifications to meet the core criteria. Specifically, they must demonstrate that the goods in question are not substitutable by any goods produced in Australia. The CEO, upon receiving an application, must promptly publish a notice in the Gazette inviting any interested party to submit objections, though no objections were received for TCO No. 0714633. Once the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods subject to the TCO, as seen with Bluescope Steel (AIS) Pty Ltd’s application for certain steel coil tongs parts, which was granted on 16 November 2007.
The consequences for non-compliance with the provisions of the Customs Act 1901, including the failure to properly apply for or issue a TCO, can be significant. While the explanatory statement does not specify detailed civil or criminal penalties, breaches of the Act can generally result in substantial fines or even imprisonment depending on the severity and intent of the breach. The specifics of penalties would be determined by the broader provisions of the Customs Act and related legislation. The Act ensures that TCOs do not retroactively affect the rights of persons other than the Commonwealth, protecting them from any disadvantages or liabilities arising from actions taken before the TCO's effective date.