EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908196
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 refactory castable mixtures on 11 March 2009.
Instrument
TCO No 0908196 was made on 29 May 2009. It declares that those certain refactory castable mixtures 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. 0908196 is taken to have come into force on 11 March 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, was introduced to provide a regulatory framework for customs and border control, including the imposition of tariffs and the facilitation of trade. One specific component of this Act is Part XVA, which establishes a scheme for Tariff Concession Orders (TCOs). These orders, made by the Chief Executive Officer of Customs, allow for the application of a lower rate of customs duty on specified goods. This mechanism was designed to address the problem of ensuring that certain imported goods are competitively priced in the Australian market, thus supporting domestic industries by preventing them from being undercut by cheaper imports. The Tariff Concession Instrument No. 0908196, issued on 29 May 2009, exemplifies this process by granting tariff concessions on certain refractory castable mixtures, effectively setting their duty rate to free, which was previously 5%. This order was made following an application by Bluescope Steel and after no objections were raised during the consultation period. The policy objective here is to support Australian industries by ensuring that essential imported goods are available at a fair price, thereby promoting a competitive and balanced market.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking to import goods into Australia, specifically those seeking tariff concessions on certain imported goods. The Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce the customs duty on specific goods, provided that no substitutable goods are produced in Australia. The scope of the Act is national, as it operates within the framework of the Commonwealth of Australia. However, the application of the Act may be extended or restricted through subordinate instruments, such as regulations or subsidiary legislation. Any exclusions or exemptions from the Act are detailed within the specific sections of the Act, such as section 269SJ, which outlines goods that cannot be subject to a TCO. The Tariff Concession Instrument No. 0908196, for instance, demonstrates how the Act applies in practice, where a TCO was granted for certain refractory castable mixtures, reducing their duty rate to free. This instrument came into effect on the date the application was lodged, as stipulated in the Act, and did not affect any existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0908196, made under section 269F of the Customs Act 1901, sets out the conditions for a Tariff Concession Order (TCO) for certain refractory castable mixtures. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, a TCO is issued. The core criteria include the condition that no substitutable goods were produced in Australia on the day the application was lodged. This is further defined in sections 269B, 269D, and 269E, which explain the terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', respectively. In this case, the CEO determined that the application met the core criteria and issued TCO No. 0908196 on 29 May 2009.
The obligations imposed by the Act on the parties involved are primarily on the CEO. According to subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions on the TCO application as soon as practicable after accepting it as valid. In this instance, the CEO published the notice for TCO No. 0908196 but did not receive any submissions in response. Additionally, under the Act, the CEO must ensure that the TCO does not affect the rights of persons, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose liabilities for actions taken before the registration date. This TCO, however, does not impose any liabilities and will benefit importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Breaching the conditions of a TCO or failing to comply with the requirements set out in the Customs Act 1901 can result in civil and criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally can lead to substantial fines and, in some cases, imprisonment. The maximum penalties for offences under the Customs Act can vary widely depending on the nature and severity of the breach. For instance, serious breaches may incur penalties of up to $22,000 or imprisonment for up to five years, or both. Given the importance of compliance with these provisions, parties subject to the Act are strongly advised to adhere to all legal requirements to avoid any adverse consequences.