EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844884
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 steel plate container loading frame on 22 December 2008.
Instrument
TCO No 0844884 was made on 20 March 2009. It declares that those certain steel plate container loading frame 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. 0844884 is taken to have come into force on 22 December 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 Tariff Concession Instrument No. 0844884, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, in this case, certain steel plate container loading frames, as applied by Bluescope Steel Pty Ltd. This instrument was created to ensure that such goods are subject to a lower rate of customs duty, in alignment with the provisions outlined in Part XVA of the Customs Act. The Tariff Concession Orders (TCOs) mechanism allows for applications to the Chief Executive Officer of Customs for tariff reductions on goods not produced in Australia in the ordinary course of business, thereby encouraging importation and potentially reducing costs for businesses. The enacting body is the Chief Executive Officer of Customs, and the policy objective is to provide relief from customs duties for specific goods that are not domestically produced, thus supporting industries reliant on imported materials. The TCO No. 0844884 was made effective from 22 December 2008, with no substitutable goods produced in Australia, leading to a tariff rate of free for the specified steel plate container loading frames, down from the general rate of 5%.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0844884, provides a framework for the concession of tariff rates for specific goods, thereby facilitating trade and reducing costs for businesses that import these goods. This Act applies to any person or entity that imports goods into Australia and seeks a reduction in customs duty on those goods, provided they meet the criteria set out in the Act. The application process involves submitting an application to the Chief Executive Officer of Customs, who then determines whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of the application. This legislation extends nationally across Australia and affects transactions involving the specified goods. Importantly, the Act does not disadvantage existing rights of persons other than the Commonwealth and does not impose any liabilities for actions taken prior to the date of the Tariff Concession Order. Subordinate instruments may further detail the application and implementation of this Act.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) include sections 269C, 269B, 269D, 269E, and 269P. Section 269C sets out the core criteria that an application must meet for a TCO to be granted. Section 269B defines terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are crucial in determining whether an application meets the core criteria. Section 269D further elaborates on what constitutes 'goods produced in Australia', while section 269E explains 'ordinary course of business'. Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to make a written order if the application meets the core criteria. The CEO must declare that the goods in question are subject to a prescribed rate of duty as specified in the order. In this particular case, Tariff Concession Order No. 0844884 was made on 20 March 2009, declaring that certain steel plate container loading frames are subject to a free rate of duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on parties applying for a TCO. The applicant, in this case Bluescope Steel Pty Ltd, must ensure that the application is not in respect of goods specified in section 269SJ of the Act. They must also ensure that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO has an obligation to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. The CEO must also decide whether the application meets the core criteria as outlined in section 269C. If satisfied, the CEO must make a written order declaring the goods to which the TCO applies.
Breaching the obligations or provisions of the Customs Act 1901 can result in various penalties and consequences. For instance, making a false statement in an application for a TCO can be considered an offence under section 231A of the Act. Such an offence can result in a civil penalty of up to $22,200 for a corporation and $4,440 for an individual, as per section 283 of the Act. Additionally, section 282 of the Act outlines that any person who contravenes a provision of the Act, including those related to TCOs, is liable to a penalty not exceeding 10,000 penalty units, which currently equates to approximately AUD 1.7 million. These penalties are intended to ensure compliance with the Act and uphold the integrity of the customs duty system.