EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718892
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 metal coating or galvanising line parts on 5 November 2007.
Instrument
TCO No 0718892 was made on 29 January 2008. It declares that those certain metal coating or galvanising line 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. 0718892 is taken to have come into force on 5 November 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. 0718892 was enacted in 2008 under the Customs Act 1901, aiming to address the need for tariff concessions for specific imported goods that have no substitutable Australian-produced equivalents. This instrument was introduced to provide relief to importers by reducing customs duty rates on certain goods, in this case, specific metal coating or galvanising line parts, where the Chief Executive Officer of Customs (CEO) determined that these goods were not produced in Australia and thus qualified for a tariff concession. The CEO, following an application by Bluescope Steel Ltd on 5 November 2007, made the Tariff Concession Order (TCO) on 29 January 2008, declaring that the goods in question were subject to a zero per cent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument was effective from the date of the application, ensuring no retroactive disadvantages to importers or imposition of new liabilities.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply lower rates of customs duty to specified goods. This Act applies to any person or entity that seeks to import goods eligible for tariff concessions, provided such goods are not those explicitly excluded under section 269SJ of the Act. The scope of the Act is national, impacting the entire Commonwealth of Australia, and it extends to any goods that are not substitutable with goods produced in Australia as of the date the TCO application was lodged. A TCO becomes effective from the date the application is lodged, as stipulated in subsection 269S(1) of the Act. The application process requires the CEO to assess whether the goods in question meet the core criteria, which include the absence of substitutable goods produced in Australia at the time of application. Exemptions from the application of the TCO are limited to those goods specified under section 269SJ, and no new liabilities are imposed on any person as a result of the TCO.
Key Provisions
The Tariff Concession Order (TCO) No. 0718892, as outlined in the Customs Act 1901, provides a specific concession on the customs duty for certain metal coating or galvanising line parts. Under section 269F (3), this instrument allows for a reduced rate of customs duty to be applied to these goods. The Act stipulates that for an application to be considered, it must not pertain to goods specified in section 269SJ, which lists goods that are ineligible for tariff concessions. The core criteria for approving a TCO application, as per section 269C, requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied with the application, a TCO is issued under section 269P(3) declaring the goods to which the concession applies. In this case, the TCO reduces the duty on these parts from a general rate of 5% to free.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. Firstly, any person who wishes to apply for a TCO must do so under section 269F, ensuring their application adheres to the criteria specified in the Act. The CEO of Customs, upon receiving an application, is mandated under section 269K(1) to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons against the concession being granted. This transparency measure ensures that all stakeholders have an opportunity to voice their concerns. Additionally, section 269S(1) requires that the TCO is considered effective from the day the application was lodged, ensuring that the timeline for the concession is clearly defined.
In the event of a breach of the terms set out in the Customs Act 1901, the legislation provides for specific penalties and consequences. Offences under the Act can lead to both civil and criminal penalties, with the severity of the penalties depending on the nature and extent of the breach. For instance, section 136 of the Act outlines the potential for fines and imprisonment for serious breaches, with maximum penalties specified for different types of offences. Civil penalties can include financial penalties, orders for restitution, or other corrective measures deemed necessary by the courts to ensure compliance with the Act. These provisions underscore the importance of adhering to the requirements and obligations set out in the legislation.
The Tariff Concession Order No. 0718892, while providing significant benefits to certain importers by reducing their customs duty liabilities, is subject to strict regulatory oversight. The Act ensures that the TCO process is transparent and fair, with clear obligations for applicants and the CEO of Customs. By specifying the criteria for tariff concessions and the process for granting them, the legislation aims to maintain a balance between encouraging trade and protecting domestic industries. The potential penalties for non-compliance or misuse of the TCO framework further reinforce the importance of adhering to the legal requirements established by the Customs Act 1901.