EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901468
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 ramming strips on 16 January 2009.
Instrument
TCO No 0901468 was made on 14 April 2009. It declares that those certain ramming strips 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. 0901468 is taken to have come into force on 16 January 2009.
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. 0901468, enacted in 2009, addresses the need for tariff concessions on specific goods by amending the Customs Act 1901. This instrument was developed in response to an application by Bluescope Steel Limited for tariff concessions on certain ramming strips. The Customs Act 1901, enacted by the Australian Parliament, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on goods not produced in Australia. The policy objective is to facilitate the importation of goods that are not domestically produced, thereby potentially reducing costs for importers and enhancing competitive market conditions. The instrument came into force on the date of the application, 16 January 2009, and does not disadvantage any person by imposing liabilities for actions taken prior to its registration.
Scope and Application
The Tariff Concession Instrument No. 0901468, made under the Customs Act 1901, applies to goods for which Bluescope Steel Limited sought a Tariff Concession Order (TCO) on 16 January 2009. The Act governs the process by which the Chief Executive Officer of Customs can reduce the rate of customs duty on specific goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The TCO pertains to certain ramming strips, for which the normal duty rate of 5% is reduced to free, and it applies nationwide as a Commonwealth instrument. The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, thus preventing any disadvantage or imposition of liabilities for actions prior to the TCO's registration. The instrument came into force on the day the application was lodged, 16 January 2009, and no submissions were received in response to the invitation for objections published in the Gazette.
Key Provisions
The Tariff Concession Order (TCO) No. 0901468, as outlined in section 269F of the Customs Act 1901, is a legislative instrument that facilitates a concession on the customs duty for certain goods. Specifically, the order pertains to certain ramming strips, which are now subject to a rate of duty of free instead of the general rate of 5% (section 269P(3)). This order was made possible because the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were being produced in Australia on the date the application was lodged, as required by section 269C. The CEO's decision to grant the TCO is predicated on the absence of goods in Australia that could substitute the use of the specified ramming strips.
The obligations imposed by this TCO on the parties it governs are primarily related to compliance with the terms of the order. Bluescope Steel Limited, as the applicant, must ensure that the goods it imports are indeed the specified ramming strips and are not being misrepresented to benefit from the tariff concession. Importers of these goods will also need to comply with the conditions set out in the order to avail themselves of the duty-free status. Under the Customs Act 1901, the CEO must ensure that the goods subject to the TCO do not have substitutable goods produced in Australia, and this is a critical condition that must be adhered to by all parties involved.
Failure to comply with the provisions of the TCO may result in civil or criminal consequences. Under section 269 of the Customs Act 1901, penalties for non-compliance can include fines and imprisonment. For instance, if an importer falsely claims that the imported goods are the specified ramming strips to benefit from the tariff concession, they could be liable to penalties. The specific penalties are not detailed in the explanatory statement but are generally governed by the Customs Act 1901, which provides for significant fines and potential imprisonment for serious breaches. The CEO has the authority to enforce these penalties to ensure that the TCO is not abused and that the intended tariff concessions are applied correctly.