EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721949
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 gas burner tundish parts on 21 December 2007.
Instrument
TCO No 0721949 was made on 14 March 2008. It declares that those certain gas burner tundish 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. 0721949 is taken to have come into force on 21 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 was enacted to provide a comprehensive framework for the administration of customs duties and other import-related regulations in Australia. One of its critical components is the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made, as outlined in Part XVA of the Act. This scheme was introduced to address the gap in providing tariff relief for goods that are not produced domestically, thereby encouraging the import of these goods and potentially benefiting consumers through lower prices. The Tariff Concession Instrument No. 0721949, enacted in 2008, exemplifies the application of this scheme. It was made by the Chief Executive Officer of Customs in response to an application from Bluescope Steel Ltd for tariff concessions on certain gas burner tundish parts. The policy objective of this instrument is to reduce the customs duty on these specific goods from the general rate of 5% to zero, thereby facilitating their importation without the burden of duty. This was achieved by confirming that no substitutable goods were produced in Australia at the time of the application.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import specific goods that are not being produced in Australia and for which no substitutable goods are produced domestically in the ordinary course of business. The geographic reach of this Act is national, applying across Australia and its territories, as it falls under Commonwealth jurisdiction. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ. The Act’s application can be extended or restricted through subordinate instruments such as regulations, which may further define terms like “ordinary course of business” and “substitutable goods”. In the specific case of TCO No 0721949, the application by Bluescope Steel Ltd for certain gas burner tundish parts was approved, resulting in a zero duty rate for these goods as of 21 December 2007, the date the application was lodged.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0721949, revolve around the creation and application of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. The CEO must determine whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia at the time the application was lodged. If the CEO is satisfied that these criteria are met, they must issue a written order declaring the goods in question subject to a lower rate of duty (section 269P(3)). This TCO specifies that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties involved, primarily the applicant and the CEO. The applicant must ensure that their TCO application is valid and meets the core criteria as stipulated in the Act. This involves providing sufficient information to demonstrate that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, must diligently review each application to determine if it meets the core criteria. If an application does meet these criteria, the CEO is obligated to make a written TCO and publish a notice in the Gazette inviting any objections or submissions from interested parties. This transparency ensures that all stakeholders have the opportunity to voice any concerns regarding the proposed concession.
In the event of a breach of any provisions within the Customs Act 1901 or the regulations made under it, various penalties and consequences can apply. While the specific penalties for breaches are not detailed in the Explanatory Statement, breaches of customs legislation generally can result in significant fines or imprisonment, or both. The maximum penalties can vary depending on the nature and severity of the breach. For instance, under the Customs Act, serious breaches can result in penalties up to thousands of dollars and/or imprisonment for several years. These penalties underscore the importance of compliance with the legislative requirements and the potential repercussions of non-compliance.