EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721917
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 stave blast furnace brick pumping material on 20 December 2007.
Instrument
TCO No 0721917 was made on 14 March 2008. It declares that those certain stave blast furnace brick pumping materials 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. 0721917 is taken to have come into force on 20 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 Customs Act 1901, enacted by the Parliament of Australia, provides for the imposition of tariffs on imported goods, while also allowing for tariff concessions in certain circumstances. This legislative framework was introduced to manage and regulate the flow of goods into Australia, balancing the need to protect domestic industries with the benefits of international trade. Specifically, Part XVA of the Act facilitates the process for granting tariff concession orders (TCOs) to reduce customs duty on particular goods, provided they meet specific criteria, such as not having substitutable goods produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0721917, issued on 14 March 2008, exemplifies this process by addressing an application from Bluescope Steel Ltd for stave blast furnace brick pumping material. The instrument declares that these materials are subject to a concession, setting their duty rate at free, as no substitutable goods were produced in Australia. This instrument aims to ensure that the rights of importers are positively affected, allowing them to apply for a refund of duty on imports made since the TCO's effective date without incurring new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0721917, made under section 269F of the Customs Act 1901, applies to the application for tariff concession orders (TCOs) submitted to the Chief Executive Officer of Customs. This Act applies specifically to entities or individuals seeking tariff concessions for goods not produced in Australia in the ordinary course of business. The instrument facilitates a lower rate of customs duty for specific goods, in this case, certain stave blast furnace brick pumping materials, which are now subject to a duty rate of free instead of the general rate of 5%. This concession is effective from the date the application was lodged, 20 December 2007, as per subsection 269S(1) of the Act. The instrument's application is national in scope, operating under the jurisdiction of the Commonwealth. Notably, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ, and requires the CEO to ensure these exclusions are adhered to before granting a TCO. The instrument does not affect any existing rights or liabilities of parties except for beneficially impacting importers who can apply for duty refunds from the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0721917, issued under the Customs Act 1901, pertains to the application of tariff concessions on specific goods. Under section 269F, an individual or entity may apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for goods not specified in section 269SJ. If the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO is obliged to issue a written order (section 269P(3)). This particular TCO, number 0721917, applies to certain stave blast furnace brick pumping materials, reducing their duty rate from 5% to free, as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
Entities and individuals governed by this Act must ensure their applications for TCOs adhere to the statutory requirements set out in sections 269B, 269C, 269D, and 269E. These sections define critical terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. The CEO has a duty to assess these criteria rigorously to determine the validity of a TCO application. Furthermore, once an application is deemed valid, the CEO must publish a notice in the Gazette inviting public submissions against the proposed TCO, as per subsection 269K(1). In this instance, the CEO did not receive any submissions.
Failure to comply with the requirements of the Customs Act 1901 or the associated regulations could lead to civil or criminal consequences. Although the explanatory statement does not specify particular offences or penalties, breaches of customs laws generally may result in fines and, in severe cases, imprisonment. The exact penalties depend on the nature and severity of the breach, with potential sanctions varying widely. For example, under section 126 of the Customs Regulations 1993, a person may be liable for a pecuniary penalty for certain contraventions. The Act does not specify a maximum penalty within the explanatory statement, but it is known that penalties can be substantial, especially for deliberate or repeated breaches.