EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720743
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 sinter rail coolers on 10 December 2007.
Instrument
TCO No 0720743 was made on 29 February 2008. It declares that those certain sinter rail coolers 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. 0720743 is taken to have come into force on 10 December 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. 0720743, made under the Customs Act 1901, was enacted to address the need for a lower rate of customs duty on specific goods that are not substitutable by Australian-produced items. This instrument was introduced to provide tariff concessions to Bluescope Steel Ltd for certain sinter rail coolers, effective from the date the application was lodged on 10 December 2007. The Customs Act 1901, as amended, enables the Chief Executive Officer of Customs to grant such concessions if no substitutable goods are produced in Australia. The instrument aims to facilitate trade by reducing the duty on these specific goods from the general rate of 5% to a free rate, thereby benefiting importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession. The legislation was enacted by the relevant legislature, ensuring that the rights of importers are protected without disadvantaging any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0720743, made under the Customs Act 1901, applies to the specific goods identified in the application by Bluescope Steel Ltd, namely certain sinter rail coolers. This Act pertains to the regulation of customs duty rates for imported goods and allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to lower the duty rate for certain goods, provided certain criteria are met. The instrument extends to the Commonwealth and its application is national in scope, affecting all importers of the specified goods within Australia. It is important to note that this TCO does not impact the rights of any person other than the Commonwealth in relation to actions taken prior to its effective date, which is 10 December 2007, the date the application was lodged. Furthermore, the instrument does not impose any new liabilities on individuals or entities. The scope of the TCO is limited to the goods specified in the application, and it does not extend to goods that are outlined in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The Act allows for the extension or restriction of its application through subordinate instruments, but in this instance, the primary legislation and the TCO itself define the parameters of application.
Key Provisions
The key operative sections of the Customs Act 1901 as they pertain to Tariff Concession Orders (TCOs) are primarily section 269F, 269C, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specified goods. Section 269C stipulates the core criteria that must be met for an application to be approved, specifically that no substitutable goods should be produced in Australia at the time the application is lodged. Section 269P outlines that if the CEO is satisfied that the application meets these core criteria, they must issue a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Customs Act on the parties involved are clearly defined. The CEO of Customs must first determine whether the application complies with section 269F and is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. Once the CEO is satisfied with the application, they must assess whether it meets the core criteria specified in section 269C. If the application passes this assessment, the CEO must then make a TCO as outlined in section 269P. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In this case, no submissions were received.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly outline specific criminal penalties for failing to comply with the TCO provisions. However, non-compliance could potentially lead to civil consequences, including disputes over duty refunds and liabilities for improperly classified goods. The general duty rate for the goods subject to the TCO is free, and failure to apply for or receive a TCO could result in the higher duty rate of 5% being applied. Importers can seek a refund of duty paid on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. The Act ensures that the TCO does not disadvantage any person or impose liabilities on individuals other than the Commonwealth in respect of actions taken before the TCO was registered.