EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826127
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 magnesia carbon refractory bricks and shapes on 12 August 2008.
Instrument
TCO No 0826127 was made on 24 October 2008. It declares that those certain magnesia carbon refractory bricks and shapes 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. 0826127 is taken to have come into force on 12 August 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 imposition of customs duties and includes provisions for Tariff Concession Orders (TCOs) to provide relief from certain duties. The Tariff Concession Instrument No. 0826127, made under this Act, addresses the specific issue of providing tariff concessions for certain magnesia carbon refractory bricks and shapes, which Bluescope Steel Pty Ltd had applied for. The primary policy objective of this instrument is to facilitate the importation of these goods at a lower or free rate of customs duty by acknowledging that no substitutable goods are produced in Australia. This measure is intended to benefit the rights of importers by potentially allowing them to claim refunds on duties paid on imports before the concession took effect. The instrument was introduced without any submissions opposing the tariff concession, indicating no significant public or stakeholder opposition to the measure.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who can demonstrate that the goods they seek to import are not substitutable by any goods produced in Australia and that these goods correspond to a prescribed tariff item under the Customs Tariff Act 1995. The application process requires that the CEO assess whether the application meets the core criteria, specifically whether no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If these criteria are met, the CEO issues a TCO, effectively reducing the customs duty on the specified goods, as seen in the case of Bluescope Steel Pty Ltd’s application for magnesia carbon refractory bricks and shapes. This TCO applies across the Commonwealth of Australia and is subject to the provisions of the Customs Tariff Act 1995, with no exclusions or exemptions specified in the legislation itself, although the scope may be further defined through subordinate instruments. The geographic reach of the Act encompasses all Australian jurisdictions, and the commencement of a TCO is effective from the date the application is lodged.
Key Provisions
The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA, as per section 269F (1). These orders apply lower rates of customs duty to certain goods, as stipulated in section 269P(3). The Chief Executive Officer of Customs (CEO) can make a TCO if an application is received and the CEO is satisfied that the application meets the core criteria, as set out in section 269C. These criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, according to section 269D and 269E.
The CEO has certain obligations under the Act. Once an application is received, the CEO must determine if it meets the core criteria, which involve ensuring that no substitutable goods were produced in Australia at the time of application, as per section 269C. If the CEO decides that the application meets these criteria, they must issue a written order, declaring that the goods are subject to the prescribed tariff item, as per section 269P(3). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who might have reasons to oppose the making of the TCO, according to subsection 269K(1).
Breaching the conditions of a TCO could lead to various consequences. Although the Act does not explicitly state the penalties for non-compliance, it is understood that failing to adhere to the terms of a TCO could result in the imposition of the higher rate of customs duty that the TCO was intended to avoid. Additionally, the CEO may take action against any party that attempts to circumvent the terms of the TCO, potentially leading to civil or criminal consequences. The specific penalties for such breaches are not outlined in the Act but could include fines or other legal actions as determined by the courts.