EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903183
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 tuyere zone refractory mortars on 30 January 2009.
Instrument
TCO No 0903183 was made on 24 April 2009. It declares that those certain tuyere zone 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. 0903183 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 Australian Parliament, provides a framework for the regulation of customs and excise duties. The Act was introduced to address the need for streamlined customs procedures, particularly in facilitating trade by reducing duties on specific goods. A notable component of this Act is Part XVA, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specified goods. The introduction of this legislation aimed to enhance trade efficiency and support economic growth by reducing the financial burden on importers of certain goods. Under section 269F, an application for a TCO can be made to the CEO, who evaluates whether the application meets the core criteria, primarily focusing on whether substitutable goods are produced in Australia. If no such goods exist, the CEO must issue a TCO, effectively granting tariff concessions on the specified goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity that seeks a concession on the customs duty applicable to imported goods, provided these goods do not fall under the exclusions listed in section 269SJ of the Act. The geographic reach of this legislation is national, as it pertains to goods imported into Australia. A TCO can only be granted if the CEO determines that the application meets the core criteria, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business. The instrument, Tariff Concession Instrument No. 0903183, was made on 24 April 2009, and it applies to certain tuyere zone refractory mortars, effectively reducing the duty on these goods from 5% to free. The TCO is effective from the date the application was lodged, 30 January 2009, and does not disadvantage any person or impose liabilities on anyone for actions taken prior to the registration date.
Key Provisions
The Customs Act 1901 provides a framework through which the Chief Executive Officer of Customs (CEO) can make Tariff Concession Orders (TCOs), as outlined in Part XVA of the Act (sections 269C, 269F, 269P). Under section 269F, an individual or entity can apply to the CEO for a TCO for certain goods, provided the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application does not involve ineligible goods and meets the core criteria set out in section 269C, they must issue a written TCO. The core criteria require that, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P respectively.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must ensure that any TCO application not pertaining to ineligible goods is assessed against the core criteria. If the criteria are met, the CEO is obligated to issue a TCO. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 0903183, no submissions were received in response to this notice.
In terms of potential breaches and consequences, the Act does not explicitly outline offences or penalties related to the making or application of TCOs. However, non-compliance with the requirements of the Act or Regulations could result in general legal consequences, such as fines or other penalties as prescribed by the relevant legislation. For instance, misuse of a TCO, such as by importing goods that do not genuinely qualify under the order, could lead to enforcement actions by Customs, including the imposition of duties or other penalties under the Customs Act or other applicable laws. The specific penalties would depend on the nature and extent of the breach, and would be determined in accordance with the relevant statutory provisions and legal principles.