EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816956
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 applied for a TCO in respect of certain sinter furnace combustion air fan on 10 July 2008.
Instrument
TCO No 0816956 was made on 26 September 2008. It declares that those certain sinter furnace combustion air fan 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. 0816956 is taken to have come into force on 10 July 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, governs the regulation of imports and exports and the collection of customs duty. To address gaps in the duty structure and encourage certain imports, the Act allows for the creation of Tariff Concession Orders (TCOs) which provide preferential duty rates for specific goods. These orders help to ensure that Australian industries remain competitive by reducing the cost of imported goods essential for production. Instrument No. 0816956, made under the Customs Act, grants tariff concessions for certain sinter furnace combustion air fans, effectively setting their duty rate at zero. This decision was made by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria outlined in the Act. The concession aims to benefit importers by potentially reducing their duty costs and does not impose new liabilities on any party.
Scope and Application
The Tariff Concession Instrument No. 0816956 under the Customs Act 1901 applies to entities seeking a concession on customs duty for specific goods, namely the certain sinter furnace combustion air fan, for which Bluescope Steel lodged an application on 10 July 2008. This instrument is specifically tailored for goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The geographic reach of this legislation is Commonwealth, applying to all imports into Australia of the specified goods. The Instrument was issued on 26 September 2008, and it reduces the duty on these goods from 5% to free, as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this Instrument is subject to the Act's exclusions, particularly those set out in section 269SJ, which lists goods that cannot be subject to a Tariff Concession Order. The CEO is required to consult by inviting submissions from interested parties, although in this case, no submissions were received. The Instrument came into force on the date the application was lodged, which is 10 July 2008, and it does not retroactively affect the rights of persons or impose new liabilities on them.
Key Provisions
The key operative sections of this legislation include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S, among others. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, as specified in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must make a written order (the TCO) declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269B defines 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'.
The Act imposes several obligations and requirements on the parties it governs. The CEO must decide whether a TCO application meets the core criteria, which involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO is also required to publish a notice in the Gazette, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. Additionally, the CEO must make a written order (the TCO) if the application meets the core criteria.
Breach of the provisions of this Act may result in various consequences. While the explanatory statement does not specify criminal or civil penalties, it is important to note that the Act itself, as well as other relevant legislation, may impose penalties for non-compliance with its provisions. For instance, the Customs Act 1901 includes provisions for penalties for offences such as making a false statement or providing false information in connection with the importation or exportation of goods, which could be applicable in the context of TCO applications.
In summary, the legislation allows for the application for tariff concession orders for certain goods, provided the core criteria are met. The CEO has specific obligations to ensure that applications are processed correctly and to facilitate consultation. While the explanatory statement does not detail specific penalties for breaches, the broader legislative framework may include provisions for penalties.