EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904506
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 gunning mixes on 11 February 2009.
Instrument
TCO No 0904506 was made on 08 May 2009. It declares that those certain gunning mixes 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. 0904506 is taken to have come into force on 11 February 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, establishes a framework through which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) that apply reduced rates of customs duty on specified goods. The introduction of Part XVA in the Act aimed to address the need for a structured process to facilitate tariff concessions for goods that are not produced domestically or where there are compelling reasons for a tariff reduction. Instrument No. 0904506, issued under this Act, was introduced to grant tariff concessions to Bluescope Steel for certain gunning mixes, effective from 11 February 2009, after the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. This instrument was published in the Gazette, inviting submissions, none of which were received, and it came into effect on the date the application was lodged, with no adverse impact on existing rights or liabilities.
Scope and Application
The Tariff Concession Instrument No. 0904506 is an instrument made under the Customs Act 1901, specifically under Part XVA which allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. This Act applies to any person or entity that is subject to the Customs Act, including importers and exporters, and pertains to goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act has a national reach as it is a Commonwealth Act. However, the application of a TCO, such as Instrument TCO No. 0904506, which was made on 08 May 2009, affects the rates of duty on specified goods as per Schedule 4 to the Customs Tariff Act 1995. The TCO provides a free rate of duty on certain gunning mixes, which previously had a general rate of 5%, and it came into force on the date the application was lodged, 11 February 2009. The application process for a TCO requires consultation as per section 269K(1) of the Act, although in this case, no submissions were received in response to the notice published in the Gazette. The Act allows for the extension or restriction of its application through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0904506 is a specific order made under section 269F of the Customs Act 1901 (the Act), establishing tariff concessions for certain gunning mixes. Section 269F allows for applications to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must issue a TCO. The TCO, in this case, applies to item 50 of Schedule 4 to the Customs Tariff Act 1995, granting a tariff concession that reduces the duty from 5% to free.
The obligations imposed by this Act on the parties involved are primarily on Bluescope Steel, who applied for the TCO, and the CEO, who must evaluate and decide on the application. According to section 269K, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Additionally, section 269S(1) stipulates that a TCO comes into force on the day the application is lodged, in this case, 11 February 2009. Importantly, section 126(1)(r) of the Regulations allows importers to apply for a refund of duty on goods imported since the TCO's effective date.
Failure to comply with the requirements set out in the Customs Act 1901 may result in various civil and criminal consequences. Under section 245A, if a person knowingly makes a false or misleading statement in an application for a TCO, they may be liable for a civil penalty of up to 10,000 penalty units. Additionally, under section 244A, any person who is found guilty of an offence against the Act may face criminal penalties, which can include fines and imprisonment, depending on the severity of the offence. The specific maximum penalties for breaches are outlined in the relevant sections of the Act, ensuring that any non-compliance is met with appropriate consequences.