EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903185
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 bosh refractory mortars on 30 January 2009.
Instrument
TCO No 0903185 was made on 24 April 2009. It declares that those certain bosh 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. 0903185 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, as amended by the Tariff Concession Instrument No. 0903185 enacted in 2009, facilitates the provision of tariff concessions for certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative instrument was introduced to address the need for reduced customs duty rates on specific goods, thereby potentially lowering import costs and encouraging trade. The Australian Parliament enacted this instrument to streamline the process of applying for and granting tariff concessions, ensuring that the criteria for such concessions are met and widely communicated. The policy objective is to support businesses by reducing the cost of imported goods, provided that no substitutable goods are produced in Australia.
The Instrument No. 0903185, which applies to certain bosh refractory mortars, was made following an application by Bluescope Steel. The Chief Executive Officer of Customs determined that these goods qualified for a tariff concession as no substitutable goods were produced domestically, leading to a reduction in the customs duty rate from 5% to free. This decision was made after a public consultation period where no objections were raised. The TCO is effective from the date the application was lodged, 30 January 2009, and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth. Importers of these goods can apply for duty refunds from the effective date, thereby benefiting from the reduced tariff rates.
Scope and Application
The Customs Act 1901, through Part XVA, allows the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) which apply reduced rates of customs duty on specified goods. The CEO must make a written order if satisfied that the application meets core criteria, primarily that no substitutable goods are produced in Australia. The instrument, Tariff Concession Instrument No. 0903185, pertains to certain bosh refractory mortars applied for by Bluescope Steel, which, following the CEO’s satisfaction that the core criteria were met, resulted in a TCO granting these goods a duty-free status. This legislation applies nationally and impacts the importation of these specific goods by reducing their customs duty from 5% to free. The TCO, effective from the date the application was lodged, does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals. Importers of the specified goods can apply for a refund of any duty paid before the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, establish a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269SJ, 269P). Section 269F allows a person to apply to the CEO for a TCO on certain goods. If the CEO determines that the application meets the core criteria outlined in section 269C, and that the goods are not specified in section 269SJ, they are required to make a written order, a TCO, specifying that the goods are subject to a particular tariff concession (section 269P(3)). This order effectively reduces the customs duty on the specified goods. The Explanatory Statement details that a TCO was issued on 24 April 2009, reducing the duty on certain bosh refractory mortars from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for applicants to ensure that their applications for TCOs are made in accordance with the provisions of the Act. The CEO has the responsibility to assess the applications, verify that they meet the core criteria, and make a decision based on whether no substitutable goods are produced in Australia (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid (subsection 269K(1)). This ensures transparency and allows for public input, although in this case, no submissions were received.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly detail penalties for failing to comply with the requirements of a TCO. However, non-compliance with customs regulations generally can lead to civil and criminal penalties under other sections of the Act. Civil penalties can include fines, and in severe cases, criminal penalties such as imprisonment may apply. The specifics of these penalties would depend on the nature and extent of the non-compliance, and any related offences under other parts of the Customs Act 1901 or the Customs Regulations 1993. The TCO itself does not impose any liabilities on any person, but it does affect the rights of importers, allowing them to apply for refunds of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).