EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802633
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 (AIS) Pty Ltd applied for a TCO in respect of certain skid buttons and or end flats on 14 February 2008.
Instrument
TCO No 0802633 was made on 18 April 2008. It declares that those certain skid buttons and or end flats 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. 0802633 is taken to have come into force on 14 February 2008.
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. 0802633, enacted under the Customs Act 1901, aims to address the need for tariff concessions on specific goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods where no substitutable goods are produced in Australia in the ordinary course of business. This mechanism was introduced to provide relief to businesses by reducing the customs duty on certain imported goods, thereby encouraging trade and economic efficiency. The instrument was enacted by the Parliament of Australia and seeks to ensure that such tariff concessions do not disadvantage existing rights or impose liabilities on any person other than the Commonwealth. Following the application by Bluescope Steel (AIS) Pty Ltd, the CEO was satisfied that the application met the core criteria, leading to the issuance of the TCO No. 0802633 which provides a duty-free rate for certain skid buttons and end flats. The process involved publishing a notice in the Gazette and accepting no submissions against the concession, resulting in the TCO coming into force on the date of the application.
Scope and Application
The Tariff Concession Instrument No. 0802633 under the Customs Act 1901 applies to goods specified in the instrument, which in this instance are certain skid buttons and end flats, and is directed towards the entity that applied for the concession, Bluescope Steel (AIS) Pty Ltd. The Act facilitates tariff concessions for goods that meet specific criteria, primarily that no substitutable goods are produced in Australia. This legislation operates within the Commonwealth jurisdiction, impacting the customs duty rates for the specified goods. The application of the Act is limited by exclusions outlined in section 269SJ, which details goods ineligible for tariff concessions. The scope of the Act can be further refined through subordinate instruments, which may introduce additional criteria or exceptions not explicitly stated in the primary legislation. The tariff concession granted by this instrument effectively reduces the customs duty from the general rate of 5% to zero for the specified goods, benefiting importers by allowing them to apply for duty refunds on imports made since the instrument's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0802633 involve the declaration of certain skid buttons and end flats as goods to which item 50 of Schedule 4 to the Tariff applies (subsection 269P(3)). This action establishes a zero percent duty rate on these goods, differing from the general rate of 5% applicable to similar goods. The instrument was issued following a successful application by Bluescope Steel (AIS) Pty Ltd on 14 February 2008, which was subsequently accepted by the Chief Executive Officer of Customs (CEO) on 18 April 2008.
The Act imposes several obligations on the parties involved. The CEO must ensure that any Tariff Concession Order (TCO) application complies with the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who might oppose the TCO. Bluescope Steel (AIS) Pty Ltd, as the applicant, must provide all necessary information and evidence to substantiate their claim that no substitutable goods are produced in Australia.
Breach of the conditions set by the TCO or failure to comply with the obligations imposed by the Customs Act 1901 may result in civil or criminal consequences. Although the Explanatory Statement does not specify particular offences, penalties for breaches of customs legislation can include fines and imprisonment. For instance, under section 235 of the Customs Act 1901, a person who makes a false statement in a customs document can be fined up to $22,000 or face imprisonment for up to two years, or both. Importers failing to comply with the terms of the TCO could also face financial penalties or be required to pay the applicable duty rates retrospectively.