EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829430
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 Limited applied for a TCO in respect of certain steam valves on 03 September 2008.
Instrument
TCO No 0829430 was made on 21 November 2008. It declares that those certain steam valves 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. 0829430 is taken to have come into force on 03 September 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 Parliament of Australia, includes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. These orders reduce the customs duty rate on certain imported goods. The Act was amended to address the gap in tariff concessions for specific imported goods that were not being produced domestically. TCO No. 0829430, made on 21 November 2008, addresses Bluescope Steel Limited's application for tariff concessions on certain steam valves, reflecting the policy objective to support Australian industries by ensuring that imports do not undercut local production, while also providing importers with a pathway to refunds for duties paid before the concession's effective date.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions for goods imported into Australia. The Act's provisions allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide a lower rate of customs duty for specified goods, provided no substitutable goods are produced in Australia in the ordinary course of business. This process applies to any applicant who meets the core criteria set out in the Act, ensuring that only those goods which are not readily available domestically can benefit from reduced duty rates. The scope of the Act is national, covering all states and territories within Australia, and it extends to any goods imported under the Customs Tariff Act 1995. Notably, the Act excludes certain goods from tariff concessions as specified in section 269SJ. The application of the Act can be further defined and extended through subordinate instruments, although the primary focus remains on facilitating duty reductions for imported goods that are not produced domestically.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they pertain to Tariff Concession Orders (TCOs), are set out in sections 269C, 269F, and 269P. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO on certain goods, provided these goods are not specified in section 269SJ as those that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria set out in section 269C, which primarily involves ensuring no substitutable goods are produced in Australia, then a written order is made under section 269P, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For instance, in this case, the CEO made Tariff Concession Order No. 0829430, which applies to certain steam valves, reducing their duty from 5% to free under item 50 of Schedule 4.
The obligations and requirements imposed by the Customs Act 1901 on parties or entities governed by it include ensuring that any applications for TCOs are made in accordance with the criteria specified in section 269C. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties who might have reasons why a TCO should not be made, as stipulated in subsection 269K(1). This process ensures transparency and allows for public consultation. In this particular case, no submissions were received by the CEO in response to the published notice, indicating that no objections were raised to the making of the TCO.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly outline specific offences related to TCOs. However, any breaches of the terms and conditions set by the TCO could lead to civil or criminal consequences under broader customs legislation. For instance, providing false information in an application could potentially lead to penalties under the Customs Act. The maximum penalties for breaches under the Customs Act can include substantial fines and, in serious cases, imprisonment. However, the specific penalties would depend on the nature and severity of the breach, and would be determined by the relevant courts.