EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720968
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 cooler parts on 07 December 2007.
Instrument
TCO No 0720968 was made on 29 February 2008. It declares that those certain sinter cooler parts no 2a 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. 0720968 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. 0720968, enacted in 2008, is a legislative measure under the Customs Act 1901, aimed at providing tariff concessions for specific goods, thereby reducing the customs duty applied to them. This legislation was introduced to address the need for a streamlined process whereby businesses could apply for tariff concessions on goods that are not produced domestically and for which no substitutable goods are available in Australia. The instrument was made under the authority of the Chief Executive Officer of Customs, who must ensure that any application for a tariff concession order meets the specified criteria before granting it. The policy objective behind this measure is to facilitate trade by reducing the cost of importing certain goods, thus benefiting importers and potentially lowering prices for consumers.
The process involves an application by a party, in this case Bluescope Steel Ltd, for tariff concessions on certain sinter cooler parts. Following the application, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the concession. In this instance, no submissions were received, leading to the issuance of the tariff concession order. The order effectively reduces the customs duty on the specified goods from a general rate of 5% to free, with the concession applying retroactively to the date the application was lodged. Importantly, the order does not adversely affect any rights or impose new liabilities on any party except the Commonwealth, and it allows for duty refunds on imports made since the concession order's effective date.
Scope and Application
The Tariff Concession Instrument No. 0720968 under the Customs Act 1901 applies to goods that are subject to a Tariff Concession Order (TCO), which is issued by the Chief Executive Officer of Customs (the CEO) in response to an application made by a person, typically a business entity, seeking a reduction in customs duty on specific imported goods. This legislation operates at the Commonwealth level and applies to any goods for which a TCO is approved, provided that the goods are not specified in section 269SJ of the Act as ineligible for such concessions. The scope of this Act is further defined by the criteria in sections 269C, 269D, 269E, and 269F, which outline the conditions under which a TCO can be granted, such as the absence of substitutable goods produced in Australia. The application of the Act can be extended or modified through subordinate instruments, allowing for adjustments to the schedule of concessional rates as necessary. Exemptions or exclusions are limited to goods specified in section 269SJ of the Act and do not impose any liabilities on individuals or entities other than the Commonwealth. The Act’s jurisdiction and application are comprehensive across Australia, impacting the import duties on specific goods as outlined in the TCO.
Key Provisions
The Tariff Concession Order (TCO) No. 0720968 under the Customs Act 1901 allows for a concession on customs duty for certain sinter cooler parts. The CEO of Customs must satisfy specific criteria before granting a TCO, including ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (sections 269C and 269P(3)). Once these criteria are met, the CEO must make a written TCO, as occurred in this case with Bluescope Steel Ltd on 29 February 2008. The TCO specifies that certain sinter cooler parts are subject to a reduced duty rate from the general rate of 5% to a concessional rate of free (section 269P(3)).
The obligations under this TCO are primarily on Bluescope Steel Ltd and the CEO of Customs. Bluescope Steel Ltd must ensure that their application meets the specified core criteria, which include the absence of substitutable goods in Australia. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting submissions from interested parties and consider any submissions received before making the TCO (subsection 269K(1)). The TCO itself does not affect existing rights of any person other than the Commonwealth and does not impose new liabilities on anyone (subsection 269S(1)).
Any breach of the conditions under which a TCO is granted can lead to civil and criminal consequences. Although the specific penalties are not detailed in this explanatory statement, under the Customs Act, general penalties for non-compliance can include fines and imprisonment. The severity of these penalties can depend on the nature and extent of the breach. For instance, knowingly making a false statement in an application for a TCO could result in substantial fines and imprisonment under section 269T of the Customs Act.
The Customs Act 1901 also provides for administrative penalties for non-compliance with the provisions of a TCO. These can include financial penalties, confiscation of goods, and other administrative actions. The maximum penalties for these offences can be significant, reflecting the seriousness of non-compliance with customs laws. The specific penalties would be determined by the courts based on the circumstances of each case.