EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901469
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 blast furnace cooling pipe on 16 January 2009.
Instrument
TCO No 0901469 was made on 14 April 2009. It declares that those certain blast furnace cooling pipe 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. 0901469 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 Customs Act 1901 was enacted to provide for the regulation of customs and excise and to establish the framework for collecting revenue from customs duties and excises. This legislation, specifically Part XVA, was introduced to address the need for tariff concession orders that allow for lower rates of customs duty on certain goods. This mechanism enables businesses to import goods at reduced duty rates if specific conditions are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0901469, made under the authority of the Customs Act 1901, was introduced to provide tariff concessions for certain blast furnace cooling pipes. The policy objective was to assist Australian industries by reducing the cost of importing these specific goods, thereby supporting competitiveness and potentially fostering industrial development. The instrument was enacted by the Chief Executive Officer of Customs, following a valid application and a review process that confirmed the absence of substitutable goods produced domestically. The instrument came into effect on the date the application was lodged, providing immediate benefits to importers who could claim refunds on duties paid before the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). These orders apply to particular goods for which a lower rate of customs duty is prescribed, provided the goods are not listed in section 269SJ of the Act, which details goods that cannot be subject to a TCO. A TCO application must meet the core criteria stipulated in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Entities such as Bluescope Steel can apply for a TCO, and once the CEO is satisfied with the application, a written order is made, specifying the new duty rate for the goods. This legislative framework applies nationwide and affects the rights of importers by potentially allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The TCO does not affect or disadvantage any person other than the Commonwealth or impose any liabilities on persons other than the Commonwealth for actions taken before the registration of the TCO. The application of this Act can be extended or restricted through subordinate instruments, as noted in the explanatory statement.
Key Provisions
The Tariff Concession Instrument No. 0901469, under the Customs Act 1901, primarily addresses the concession of customs duty for certain goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria outlined in sections 269C, 269B, and 269E, they must make a TCO that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, Instrument TCO No. 0901469 was made on 14 April 2009, applying a zero duty rate to certain blast furnace cooling pipes.
The Act imposes specific obligations on both the CEO and applicants for a TCO. The CEO must ensure that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit their views on the proposed TCO. In this instance, no submissions were received, and thus, the CEO proceeded with the order. The applicant, Bluescope Steel, must provide sufficient evidence that no substitutable goods are produced in Australia and that the goods in question are eligible for tariff concession.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO can lead to significant consequences. While the explanatory statement does not specify penalties for non-compliance, breaches of the Act may result in civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. Importers or exporters found to be misapplying a TCO may also face penalties under relevant sections of the Act or the Customs Tariff Act 1995.
The commencement of a TCO, as stated in subsection 269S(1), is effective from the date the application is lodged. In this case, TCO No. 0901469 is effective from 16 January 2009. Importantly, the TCO does not affect any rights of persons other than the Commonwealth and does not impose any liabilities for actions taken before its registration. Importers of the affected goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations, which provides a financial benefit for those who have already imported the goods before the TCO took effect.
Overall, the Tariff Concession Instrument No. 0901469 facilitates a reduction in customs duty for certain blast furnace cooling pipes, subject to the conditions set out in the Customs Act 1901. This legislation ensures that applicants and the CEO adhere to specific criteria and obligations, with potential consequences for non-compliance, thereby maintaining the integrity of the customs duty system in Australia.