EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831072
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 heating assembly parts on 12 September 2008.
Instrument
TCO No 0831072 was made on 05 December 2008. It declares that those certain heating assembly parts 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. 0831072 is taken to have come into force on 12 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 Australian Parliament, provides a framework for the administration of customs and excise duties, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0831072, issued in 2008, addresses the gap in duty concessions for specific goods by granting a tariff concession to Bluescope Steel Limited for certain heating assembly parts, following an application under section 269F of the Act. The instrument was made to provide tariff relief where no substitutable goods were produced in Australia, as required by section 269C of the Act. The objective of this legislation, as indicated in the explanatory statement, is to ensure that the application of customs duty is fair and does not disadvantage Australian producers or importers, thereby promoting trade and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0831072 under the Customs Act 1901 applies to Bluescope Steel Limited’s application for tariff concessions on certain heating assembly parts, which was lodged on 12 September 2008. This instrument is applicable to the specific goods mentioned in the application, which the Chief Executive Officer of Customs has determined do not have substitutable goods produced in Australia, thereby meeting the core criteria for a Tariff Concession Order (TCO). The TCO, effective from the date of application, alters the customs duty rate from the general 5% to a concessional rate of free. The scope of the Act includes any person or entity that applies for such tariff concessions, provided the application complies with the statutory requirements and does not pertain to goods specified in section 269SJ of the Act. The Act operates nationally across Australia, as it is a Commonwealth Act, and the application of the TCO is subject to the broader Customs Act 1901 and the Customs Tariff Act 1995. The Act does not specify exclusions, exemptions, or thresholds apart from those stipulated in the sections referenced, and the application of the TCO is further regulated by the Customs Regulations 1995.
Key Provisions
The main operative sections of the Customs Act 1901, particularly section 269C, detail the criteria that must be met for a Tariff Concession Order (TCO) to be granted. Essentially, the CEO of Customs must determine that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (section 269C). For the purposes of this legislation, "substitutable goods" refer to goods produced in Australia that can serve a similar purpose or design use as the goods for which the TCO is being sought (section 269D and 269E). If these conditions are satisfied, the CEO must issue a written TCO (section 269P(3)).
In terms of obligations, the CEO has a responsibility to assess TCO applications against the core criteria specified in the Act. This includes determining whether substitutable goods are produced in Australia and ensuring that the application does not pertain to goods explicitly excluded under section 269SJ. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the granting of the TCO (subsection 269K(1)). The CEO must also ensure that the TCO does not adversely affect any person's rights or impose new liabilities on anyone, except the Commonwealth, regarding actions taken before the TCO's effective date (subsection 269S(1)).
The obligations extend to Bluescope Steel Limited, who must ensure that their TCO application is complete and meets all specified criteria. They must provide accurate and comprehensive information to support their application, ensuring that it aligns with the requirements set out in the Customs Act 1901. Failure to do so could result in the application being rejected.
The Act also outlines the consequences of non-compliance or breach of its provisions. While the explanatory statement does not explicitly detail criminal offences, it does highlight the potential for civil consequences. For instance, if a party fails to comply with the terms of a TCO or engages in activities that contravene the Customs Act 1901, they may face penalties. The maximum penalties for breaches of the Customs Act 1901 can include substantial fines and, in severe cases, imprisonment. The specifics of these penalties would be determined based on the nature and severity of the breach, but they serve as a deterrent against non-compliance with the Act's provisions.