EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720949
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 ignitors parts on 07 December 2007.
Instrument
TCO No 0720949 was made on 29 February 2008. It declares that those certain ignitors 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. 0720949 is taken to have come into force on 07 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. 0720949 was enacted in 2008 as a means to provide relief under the Customs Act 1901. This instrument was introduced to address the problem of ensuring that certain goods, which are not produced in Australia and have no substitutable domestic goods, are subject to a lower rate of customs duty. This is achieved through the establishment of Tariff Concession Orders (TCOs), which apply to goods specified in Schedule 4 of the Customs Tariff Act 1995. The instrument was made by the Chief Executive Officer of Customs, following an application by Bluescope Steel Ltd for a TCO concerning specific ignitor parts. The policy objective of this measure is to facilitate the importation of goods that are not produced domestically, thereby benefiting importers by reducing their duty obligations.
The enacting body in this context is the Chief Executive Officer of Customs, who has the authority under section 269F of the Customs Act 1901 to make TCOs. The CEO’s decision to grant the concession was based on the determination that no substitutable goods were produced in Australia on the date the application was lodged. Consequently, the TCO declares that the specified ignitor parts are subject to a duty rate of free, as opposed to the general rate of 5%. Importantly, the instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on anyone for actions taken prior to its registration.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to any person or entity seeking a reduction in customs duty on imported goods that meet specific criteria. The Act allows the Chief Executive Officer of Customs to make a TCO if no substitutable goods are produced in Australia in the ordinary course of business. This applies to a national jurisdiction, as the Customs Act is a Commonwealth Act. The TCO in question, Instrument No. 0720949, pertains to certain ignitors parts applied for by Bluescope Steel Ltd, which are now subject to a duty rate of free, down from the general rate of 5%. The Act requires that any person who believes a TCO should not be made must submit their reasons to the CEO; however, in this instance, no such submissions were received. The TCO does not retroactively affect any rights or impose liabilities on any person other than the Commonwealth, and it came into effect on the date the application was lodged, which was 7 December 2007.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer (CEO) of Customs. A TCO application (section 269F) can be submitted by any person seeking a lower rate of customs duty on specified goods. The CEO must first ascertain that the goods in question are not those prohibited under section 269SJ of the Act before evaluating the application against the core criteria specified in section 269C. If satisfied that these criteria are met, the CEO is mandated to issue a written TCO order (section 269P(3)). For example, in the case of Bluescope Steel Ltd, a TCO (No. 0720949) was issued on 29 February 2008, declaring that certain ignitors parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the duty rate set at free instead of the general rate of 5%.
The obligations under this Act are clear and specific. Any person applying for a TCO must ensure that the goods in question are not those listed in section 269SJ and must meet the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the date the application was lodged. The CEO, on the other hand, has the responsibility to review the application, publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)), and make a decision based on the merits of the application. In the case of Bluescope Steel Ltd, the CEO confirmed that no substitutable goods were produced in Australia, thus satisfying the criteria for the issuance of the TCO.
Failure to comply with the requirements of the Customs Act 1901 can result in various consequences. While the Act does not explicitly outline offences or penalties for non-compliance with TCO applications, breaches of other provisions within the Customs Act may lead to civil or criminal penalties. For example, providing false information in an application could potentially lead to fines or imprisonment under other sections of the Act. Furthermore, any misuse of the TCO could result in the revocation of the concession and possible legal action. It is important for all parties to adhere to the provisions of the Act to avoid any adverse outcomes.
In conclusion, the Customs Act 1901, through its Part XVA, provides a structured approach to issuing TCOs that benefit certain goods by lowering their customs duty rates. The CEO of Customs holds the authority to issue these orders, subject to stringent criteria and a transparent process that includes public consultation. The Act imposes clear obligations on applicants and the CEO, ensuring that the process is fair and justifiable. Any breaches of the Act's provisions, while not explicitly detailed in the context of TCOs, could lead to significant civil or criminal repercussions.