EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718662
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 rolling mill or roughing mill parts on 31 October 2007.
Instrument
TCO No 0718662 was made on 29 January 2008. It declares that those certain rolling mill or roughing mill 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. 0718662 is taken to have come into force on 31 October 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, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs). These orders provide for a reduced rate of customs duty on specified goods, intended to facilitate the import of products that are not produced domestically, thereby promoting trade and economic efficiency. This legislative mechanism was introduced to address the gap in ensuring that essential goods not produced in Australia are accessible at a lower cost, aiding in the economic viability of businesses that rely on these imports. The policy objective behind the Tariff Concession Orders is to support the competitive advantage of Australian businesses by allowing them to import certain goods without incurring high customs duties, provided these goods are not manufactured locally. This approach encourages trade and helps to keep costs down for businesses that depend on these imports.
Scope and Application
The Customs Act 1901, under Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods into Australia that are eligible for reduced customs duties under a TCO. The scope of the Act extends to all goods that can be subject to a TCO, provided they are not listed in section 269SJ, which specifies goods ineligible for tariff concessions. The Act’s jurisdiction is national, impacting all importers across Australia. The process for issuing a TCO begins with an application to the CEO, who must determine whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia. Once a TCO is issued, it applies retroactively to the date of application lodging, thereby benefiting importers by potentially entitling them to refunds of duty paid on those goods since that date. Importantly, the TCO does not affect any pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth. The Act’s application can be extended or clarified through subordinate instruments, ensuring its provisions are appropriately tailored to the nuances of specific cases or industries.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0718662 pertain to the application and granting of a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F of the Act allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO determines that the application does not involve goods that are prohibited by section 269SJ of the Act, they must then assess whether the application meets the core criteria set out in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, as defined by sections 269D and 269E of the Act. Once the CEO is satisfied that these criteria are met, they must issue a TCO as specified in section 269P(3) of the Act, thereby applying a prescribed tariff rate from the Customs Tariff Act 1995.
The obligations imposed by this legislation are primarily on the CEO, who must ensure that applications for TCOs are thoroughly assessed against the criteria outlined in the Customs Act 1901. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the granting of a TCO, as required by section 269K(1) of the Act. This transparency mechanism is intended to provide an opportunity for stakeholders to voice any objections before a TCO is issued. In this instance, the CEO received no submissions in response to the published notice for TCO No. 0718662.
Failure to comply with the requirements of the Customs Act 1901 and the associated TCO regulations can result in legal consequences. While the specific offences, penalties, or consequences for breach are not detailed in the explanatory statement, the general framework under which the TCO operates suggests that non-compliance could lead to civil or criminal penalties, depending on the nature and severity of the breach. The exact penalties would be determined in accordance with the provisions of the Customs Act 1901 and any other relevant legislation, which may include fines or other sanctions. The Act's emphasis on ensuring that the rights of individuals and entities are not adversely affected by the issuance of a TCO further underscores the importance of adhering to these obligations.