EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808539
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.
Bisalloy Steels Pty Ltd applied for a TCO in respect of certain roll parts for hardening furnaces on 16 May 2008.
Instrument
TCO No 0808539 was made on 04 August 2008. It declares that those certain roll parts for hardening furnaces 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. 0808539 is taken to have come into force on 16 May 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, facilitates the creation of Tariff Concession Orders (TCOs) to address gaps in the availability of specific goods produced within Australia, thereby fostering economic efficiency and accessibility. This piece of legislation was enacted to allow for the application of lower customs duties on certain goods, provided no suitable alternatives are produced domestically. In response to an application by Bisalloy Steels Pty Ltd, Tariff Concession Order No. 0808539 was issued on 4 August 2008, which applied a zero duty rate to certain roll parts for hardening furnaces, effective from 16 May 2008. This measure was taken to ensure that these specific goods could be imported without incurring the standard 5% customs duty, thereby enhancing their availability and affordability in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0808539 under the Customs Act 1901 applies to specific goods that are subject to a Tariff Concession Order (TCO). This instrument is directed at businesses or entities that import the designated goods, such as Bisalloy Steels Pty Ltd which applied for the concession concerning certain roll parts for hardening furnaces. The TCO provides these entities with a reduced customs duty rate, offering them an economic advantage in their import transactions. The instrument's application is triggered by an application to the Chief Executive Officer of Customs (CEO), who assesses whether the core criteria, including the non-existence of substitutable goods produced in Australia, are met. The geographic reach of this Act is national, as it pertains to customs duties across Australia. The Act does not specify exclusions, exemptions, or thresholds beyond those detailed in the Act itself, but it is clear that certain goods listed in section 269SJ cannot be subject to a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments, although this specific TCO does not appear to rely on such mechanisms.
Key Provisions
The Tariff Concession Instrument No. 0808539 under the Customs Act 1901 (section 269F) provides a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concession orders (TCOs) that reduce the customs duty on specific goods. Section 269C stipulates that for a TCO to be considered, there must be no substitutable goods produced in Australia on the day the application is lodged. This means that if the goods applied for can be replaced by Australian-made products that serve the same purpose, a TCO cannot be granted. Section 269P(3) mandates that if the CEO is satisfied with the application, a written TCO must be issued. For the particular case of Bisalloy Steels Pty Ltd, this order (section 269S(1)) came into effect on 16 May 2008, the date the application was lodged.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure their application meets the core criteria, primarily that no substitutable goods are produced in Australia on the date of application. The CEO, on the other hand, has the responsibility to review the application, determine if it meets the criteria, and publish a notice in the Gazette inviting any interested parties to submit objections (subsection 269K(1)). In this instance, no objections were received. Once a TCO is issued, it must be registered, and it cannot affect any pre-existing rights or impose liabilities on anyone for actions taken before its registration.
Breaching the conditions set out in the Customs Act 1901 can result in various consequences. While the explanatory statement does not detail specific penalties for non-compliance with TCO provisions, breaches of the Customs Act generally can lead to civil and criminal penalties. For instance, knowingly making a false statement or representation in an application can attract penalties as stipulated in sections 232 and 233 of the Act. Civil penalties can include fines up to $22,200 per offence, while criminal penalties may result in imprisonment for up to five years. These provisions ensure that the integrity of the tariff concession process is maintained, and the rights of all parties are protected.