EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803432
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 Pty Ltd applied for a TCO in respect of certain steel strip oiler blade on 03 March 2008.
Instrument
TCO No 0803432 was made on 23 May 2008. It declares that those certain steel strip oiler blades 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. 0803432 is taken to have come into force on 03 March 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the application and management of tariff concessions through Tariff Concession Orders (TCOs). The Act enables the Chief Executive Officer of Customs to grant tariff concessions on certain goods, which results in a lower rate of customs duty for those goods. This legislative mechanism was introduced to address the need for flexibility in tariff application, particularly to ensure that Australian industries have access to necessary goods without excessive customs burdens where no domestic alternatives exist. The explanatory statement for Instrument No. 0803432 clarifies that this particular TCO, applied to certain steel strip oiler blades, was made on 23 May 2008, and it came into force on the date the application was lodged, 3 March 2008. This instrument was designed to provide tariff relief for these specific goods, aligning with the policy objective of supporting industries by reducing the cost of importing goods that are not produced domestically.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods that attract a reduced rate of customs duty, contingent upon the absence of substitutable goods being produced in Australia in the ordinary course of business. The application process involves an individual or entity, such as Bluescope Steel Pty Ltd, submitting an application to the CEO, who then assesses whether the application meets the stipulated core criteria. Should the CEO be satisfied that the application meets these criteria, they are mandated to issue a TCO, which is effective from the date the application was lodged. This legislative framework applies nationally, impacting importers by potentially entitling them to a refund of duty on goods imported since the TCO's effective date. Notably, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person. The legislation also allows for public consultation following the acceptance of a valid application, although in this instance, no submissions were received.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0803432, under the Customs Act 1901, establish the process for granting tariff concessions on specific goods. According to section 269F, an application can be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in relation to certain goods. The CEO is required to determine if the application meets the core criteria set out in section 269C, which necessitates that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If these criteria are satisfied, the CEO must issue a written order (section 269P(3)). In this case, the TCO No. 0803432 was made on 23 May 2008, declaring that certain steel strip oiler blades are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must ensure that the application is valid and not in respect of goods specified in section 269SJ. If the application meets the core criteria, the CEO must make a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received.
Under the Customs Act 1901, there are no explicit provisions within the explanatory statement that detail specific offences, penalties, or civil/criminal consequences for breach. However, the Act generally provides that a TCO does not affect the rights of a person (other than the Commonwealth) to disadvantage them or impose liabilities for actions taken before the registration of the TCO. In this case, the TCO does not impose any liabilities on any person, and it beneficially affects the rights of importers, who can apply for a refund of duty on goods imported since the TCO came into force. Any breach of the conditions set out in the TCO or related legislation would likely be addressed under the general provisions of the Customs Act 1901 and associated regulations, which may include fines or other penalties for non-compliance.