EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903184
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 or cushion refractory mortars on 30 January 2009.
Instrument
TCO No 0903184 was made on 24 April 2009. It declares that those certain tuyere zone or cushion 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. 0903184 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, established the framework for the administration of customs and excise duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. The act was designed to address the gap in providing relief from customs duty on goods that are not produced domestically, thereby facilitating trade and encouraging the importation of such goods. The Tariff Concession Instrument No. 0903184, enacted on 24 April 2009, exemplifies this by granting tariff concessions on certain tuyere zone or cushion refractory mortars, responding to an application from Bluescope Steel. This instrument came into effect on 30 January 2009, the date the application was lodged, with the objective of ensuring that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The instrument does not affect existing rights or impose new liabilities on anyone other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0903184 under the Customs Act 1901 applies to entities such as Bluescope Steel that apply for tariff concessions on specific goods. The scope of this legislation is focused on the administration of tariff concessions for goods, particularly those for which no substitutable goods are produced in Australia, thereby ensuring that local industries are not adversely affected by the concession. This Act extends to the entire Commonwealth of Australia, and its application is facilitated through the Chief Executive Officer of Customs, who is mandated to evaluate and approve applications for tariff concession orders based on specific criteria. Notably, this legislation does not apply to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. Additionally, the Act ensures that the rights of persons other than the Commonwealth are protected, and no new liabilities are imposed on these persons as a result of the concession. The commencement date for the application of this Tariff Concession Order is the day the application was lodged, which in this instance was 30 January 2009.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0903184 under the Customs Act 1901 (the Act) revolve around the application and approval of a Tariff Concession Order (TCO) for certain refractory mortars, as applied for by Bluescope Steel on 30 January 2009 (sections 269F, 269C, 269P(3)). The Act allows the Chief Executive Officer of Customs (the CEO) to grant a TCO if no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must publish a notice in the Gazette inviting submissions on the TCO application (subsection 269K(1)). Once the CEO is satisfied that the application meets the core criteria, a TCO must be issued, declaring that the goods in question are subject to a prescribed tariff item (section 269P(3)). In this case, the TCO declares that certain tuyere zone or cushion refractory mortars are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a general rate of duty of 5% reduced to free under the TCO (section 269P(3)).
The Act imposes several obligations on the parties involved in the TCO process. The CEO must ensure that the TCO application meets the core criteria before making a written order (sections 269C, 269P(3)). The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any interested parties to submit objections (subsection 269K(1)). Bluescope Steel, as the applicant, must provide all necessary information to demonstrate that the goods are eligible for a TCO, including evidence that no substitutable goods were produced in Australia. The TCO itself imposes no new liabilities on any person and does not affect any pre-existing rights, except to the benefit of importers who can apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).
Any breach of the requirements set out in the Customs Act 1901 can lead to civil or criminal consequences. Although the specific penalties for breaches are not detailed in the explanatory statement, it is known that the Act provides for a range of penalties for non-compliance with customs regulations. These can include fines and imprisonment for serious breaches. In the context of TCOs, if an applicant provides false or misleading information in their application, they may face penalties under the Act for making false statements or for contravening a requirement of the Act. The CEO, as the authority overseeing the TCO process, has the power to enforce compliance and can take action against those who breach the provisions of the Act or the conditions of a TCO.