EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903182
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 taphole refractory mortars on 30 January 2009.
Instrument
TCO No 0903182 was made on 24 April 2009. It declares that those certain taphole refractory mortars 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. 0903182 is taken to have come into force on 30 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, enacted by the Parliament of Australia, establishes a framework for the regulation of customs duties. This Act aims to facilitate the smooth flow of goods across Australia's borders by providing mechanisms for the concession of customs duties in certain circumstances. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to lower the rate of customs duty on particular goods. This legislative framework was introduced to address the need for tariff concessions that can stimulate economic activity and support industries by reducing the cost of importing certain goods. The explanatory statement for Tariff Concession Instrument No. 0903182 details an application by Bluescope Steel for a TCO on taphole refractory mortars, illustrating the Act's application in practice. The instrument was issued on 24 April 2009, following the CEO's determination that no substitutable goods were produced in Australia, thereby meeting the core criteria outlined in the Act.
Scope and Application
The Tariff Concession Instrument No. 0903182, under the Customs Act 1901, applies to the specific case of Bluescope Steel's application for tariff concessions on certain taphole refractory mortars. This application was made to the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) that can alter the rate of customs duty on certain goods. This Act applies to any person or entity seeking a tariff concession for goods that meet the specified criteria, particularly those not produced in Australia and for which no substitutable goods are produced domestically. The geographic reach of this legislation is nationwide, as it pertains to federal customs duties. However, it excludes goods specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The application of the Act can be extended or restricted through subordinate instruments, though the specific TCO in question does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. The commencement date of this TCO is the day the application was lodged, 30 January 2009, and the concession provides for the duty on these specific goods to be free, down from the general rate of 5%.
Key Provisions
The main operative sections of this legislation focus on the process for applying for and making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the date the application was lodged (section 269D and 269E). If the application meets these criteria, the CEO is required to make a written order (section 269P(3)) that declares the goods to which the TCO applies, effectively granting them a lower rate of customs duty.
The obligations and requirements imposed by the Act on the parties involved include the application process for a TCO. The applicant must ensure their application is not in respect of goods specified in section 269SJ of the Act, which lists goods ineligible for a TCO. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO if the application meets the core criteria. The TCO, once made, does not affect the rights of any person as at the date of registration to their disadvantage or impose liabilities for actions taken before the registration date.
The legislation also outlines potential consequences for non-compliance. Although the Explanatory Statement does not explicitly list offences, penalties, or civil/criminal consequences for breach, it is implied that failure to adhere to the requirements for applying for a TCO or for the CEO to properly assess and issue a TCO could lead to disputes over the validity of the order or the duty rates applied. However, no specific maximum penalties are mentioned within the provided text. The consequences of breaching the terms of the TCO or failing to comply with the Customs Act 1901 could potentially result in legal actions, penalties, or other enforcement measures as prescribed under the relevant sections of the Act.