EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833622
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 steel strip finishing mill gearboxes on 01 October 2008.
Instrument
TCO No 0833622 was made on 19 December 2008. It declares that those certain steel strip finishing mill gearboxes 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. 0833622 is taken to have come into force on 01 October 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 Commonwealth Parliament, established a framework under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs. This legislation aimed to address the gap in providing tariff concessions for specific goods, thereby potentially lowering customs duty rates for certain imported goods. Instrument No. 0833622, enacted as part of this Act, was introduced to provide tariff concessions for certain steel strip finishing mill gearboxes, where the Chief Executive Officer determined that no substitutable goods were produced in Australia, satisfying the core criteria under section 269C of the Act. This instrument, effective from the date of the application, was designed to benefit importers by potentially allowing them to claim refunds on duties paid for goods imported since the date the TCO was taken to have come into force, without imposing any liabilities on other parties.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is specified, contingent upon meeting certain criteria. The Act permits individuals or entities to apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which excludes particular goods from being subject to a TCO. The CEO must determine if the application meets the core criteria, primarily whether no substitutable goods were produced in Australia in the ordinary course of business at the time of application. Should these criteria be satisfied, the CEO issues a TCO, effectively applying a prescribed tariff from Schedule 4 of the Customs Tariff Act 1995 to the specified goods. For instance, TCO No 0833622, made on 19 December 2008, applied to certain steel strip finishing mill gearboxes, setting their duty rate to free instead of the general 5%. The TCO mechanism is national in scope, applying across Australia and affecting all relevant importers by providing them with the right to claim duty refunds for imports since the TCO's effective date, while ensuring no pre-existing rights or liabilities of non-Commonwealth entities are adversely impacted.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0833622 under the Customs Act 1901 (section 269F) enable the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) that lower the rate of customs duty on certain goods. Specifically, section 269C sets out the core criteria that must be met for a TCO to be granted, ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. When the CEO is satisfied that these criteria are met, they must make a written TCO (section 269P(3)). Instrument No. 0833622 was made on 19 December 2008, declaring that certain steel strip finishing mill gearboxes, which were the subject of an application by Bluescope Steel Limited on 1 October 2008, are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, rather than the general rate of 5%.
The Customs Act 1901 imposes several obligations on the parties involved with TCOs. Firstly, applicants such as Bluescope Steel Limited must ensure that their application for a TCO meets the core criteria specified in section 269C. This requires them to demonstrate that no substitutable goods are produced in Australia on the date the application is lodged. The CEO, on the other hand, is required to assess the application against these criteria and make a decision based on the evidence provided. Once a TCO is made, the CEO must also publish a notice in the Gazette (subsection 269K(1)), inviting submissions from any interested parties. In the case of Instrument No. 0833622, no submissions were received. The Act further mandates that the TCO does not affect the rights of persons as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(1)).
Offences, penalties, or consequences for breach of the provisions in the Customs Act 1901 are not explicitly detailed in the Explanatory Statement for Instrument No. 0833622. However, the Act generally provides for various enforcement measures, including fines and imprisonment, for breaches of customs laws. Although the specific penalties for non-compliance with TCO provisions are not stated here, it is likely that they align with the broader penalties outlined in the Customs Act. The Act allows for substantial fines and potential imprisonment for serious breaches, emphasising the importance of adhering to the legislative requirements.
In summary, Tariff Concession Instrument No. 0833622 facilitates the concession of customs duty on certain steel strip finishing mill gearboxes by declaring them subject to a free rate of duty. The Act requires applicants to meet specific criteria and mandates the CEO to assess and publish notices regarding TCO applications. While the Explanatory Statement does not detail specific penalties for breaches, the broader customs legislation provides for significant enforcement actions to ensure compliance.