EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802771
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 ignition furnace pallet cars on 9 April 2008.
Instrument
TCO No 0802771 was made on 27 June 2008. It declares that those certain ignition furnace pallet cars 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. 0802771 is taken to have come into force on 9 April 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. 0802771 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions for specific goods. The instrument was introduced to facilitate tariff reductions for certain goods, such as ignition furnace pallet cars, by the Chief Executive Officer of Customs when it is determined that no substitutable goods are produced in Australia. This initiative aims to encourage trade and reduce costs for businesses importing these goods, thereby supporting economic efficiency and competitiveness. The instrument was developed following an application by Bluescope Steel Ltd and was published in the Gazette with an invitation for public submissions, although none were received. The tariff concession became effective on the date the application was lodged, 9 April 2008, and it does not disadvantage any party or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0802771, made under the Customs Act 1901, applies to entities such as Bluescope Steel Ltd, which have applied for and been granted a Tariff Concession Order (TCO) in relation to specific goods. This instrument grants a tariff concession, specifically reducing the duty on certain ignition furnace pallet cars from the general rate of 5% to free, provided that no substitutable goods are produced in Australia on the day the application was lodged. The geographic reach of this Act extends across the Commonwealth of Australia, impacting entities involved in the importation of these goods. The Act includes exclusions for goods specified in section 269SJ, which cannot be subject to a TCO. The application of the TCO is further governed by the Customs Tariff Act 1995, where specific duty rates are detailed in Schedule 4. The process for applying for a TCO is outlined in Part XVA of the Customs Act, where the Chief Executive Officer of Customs must assess the application against the core criteria. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted before the registration date of the TCO.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). When an application for a TCO is made, the CEO must first determine if the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO finds that the application does not involve these ineligible goods, they must then assess whether the application meets the core criteria outlined in section 269C. This involves confirming that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, as defined in sections 269D and 269E of the Act.
The obligations imposed by the Act on parties or entities governed by it include the necessity for applicants to provide sufficient evidence that no substitutable goods were produced in Australia on the date of the application. The CEO is mandated to publish a notice in the Gazette once an application is accepted as valid, inviting submissions from any interested parties who believe the TCO should not proceed (subsection 269K(1)). In this instance, no submissions were received in response to the published notice. Furthermore, the TCO ensures that the rights of individuals, apart from the Commonwealth, are not adversely affected by the order, meaning it does not impose any liabilities on any person for actions taken prior to the date of registration (subsection 269S(1)).
Should any party fail to comply with the obligations stipulated by the Customs Act 1901 or the associated regulations, they may face legal repercussions. The penalties for breaches can be significant and include both civil and criminal consequences. For instance, the imposition of fines or imprisonment may occur depending on the severity and intent behind the breach. The exact penalties vary, but they can be substantial, reflecting the importance of adhering to the Act’s requirements. It is crucial for all parties involved to ensure full compliance to avoid such adverse outcomes.