EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0841108
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 tundish sprayers on 25 November 2008.
Instrument
TCO No 0841108 was made on 27 February 2009. It declares that those certain tundish sprayers 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. 0841108 is taken to have come into force on 25 November 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 provides a framework under which Tariff Concession Orders (TCOs) can be made, enabling a lower rate of customs duty on certain goods. This legislation was enacted to address the need for concessional tariff rates for specific goods where no substitutable domestic products exist, thereby supporting industries that rely on imported materials. The Tariff Concession Instrument No. 0841108, issued by the Chief Executive Officer of Customs, applies this framework to certain tundish sprayers, providing a tariff concession based on the absence of substitutable goods produced in Australia. The instrument was introduced following an application by Bluescope Steel, and after no objections were received, it came into effect on 25 November 2008, the date the application was lodged. The policy objective here is to facilitate trade and support domestic industries by reducing import costs for specific goods, without imposing any new liabilities on the public.
Scope and Application
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be made, allowing for lower rates of customs duty on specified goods. The Act applies to any person who may apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided those goods are not specified in section 269SJ as ineligible for such concessions. The application process involves satisfying the core criteria set out in section 269C, which includes ensuring that no substitutable goods are produced in Australia at the time of application. Once the CEO is satisfied with the application, they are required to make a written order declaring the goods eligible for a prescribed tariff item, as detailed in Schedule 4 of the Customs Tariff Act 1995. The scope of the Act extends nationally across Australia, encompassing all industries and entities involved in the importation of goods. Any exclusions or exemptions are narrowly defined within the Act, ensuring that only specific goods, as per section 269SJ, are ineligible for TCOs. The application of the Act may be further detailed or refined through subordinate instruments, although the primary legislation itself sets out the foundational criteria and processes.
Key Provisions
The Tariff Concession Instrument No. 0841108 under the Customs Act 1901 provides a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (sections 269C, 269F, 269SJ). Section 269C stipulates that a TCO application is eligible if no substitutable goods are produced in Australia on the day the application was made. The CEO must then issue a written order, a TCO, declaring that the goods in question fall under a specified item in Schedule 4 of the Customs Tariff Act 1995 (section 269P). In the case of Bluescope Steel's application for tundish sprayers, the CEO issued TCO No. 0841108 on 27 February 2009, as no substitutable goods were being produced in Australia, and the general duty rate of 5% was waived for these specific goods.
The Act imposes several obligations on parties involved in the TCO process. The CEO must assess the validity of an application against the criteria set out in section 269C and ensure that the goods are not specified in section 269SJ, which excludes certain goods from TCOs. Additionally, the CEO must publish a notice in the Gazette once an application is accepted, inviting any objections or submissions from interested parties (subsection 269K(1)). This process ensures transparency and allows for stakeholder input before a TCO is made. In this instance, no submissions were received in response to the published notice for TCO No. 0841108.
Under the Customs Act 1901, breaches of the requirements or misuse of a TCO can lead to significant consequences. While specific offences related to TCOs are not detailed in the provided text, the Act generally imposes penalties for non-compliance with customs regulations. Penalties for customs-related offences can include fines and, in some cases, imprisonment. The maximum penalties for breaches of the Customs Act 1901 can be severe, with fines potentially reaching up to $22,000 for individuals and substantially higher for corporations, alongside possible imprisonment terms. The Act ensures that any misuse of the TCO provisions, such as providing false information or using a TCO for ineligible goods, would be subject to these stringent penalties.