EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908198
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 refractory cement on 11 March 2009.
Instrument
TCO No 0908198 was made on 29 May 2009. It declares that those certain refractory cement 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. 0908198 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 Tariff Concession Instrument No. 0908198, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods that are not produced domestically. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which reduce the customs duty on certain imported goods if no substitutable goods are produced in Australia. This instrument was made in response to an application by Bluescope Steel for tariff concessions on certain refractory cement, which was granted as no substitutable goods were being produced in Australia. The instrument was published in the Gazette with no objections received, and it came into effect on 11 March 2009. The primary objective of this legislation is to facilitate the importation of goods that are critical for industries and consumers, ensuring that Australian businesses have access to competitively priced goods without imposing any new liabilities on the public.
Scope and Application
The Tariff Concession Instrument No. 0908198 under the Customs Act 1901 applies to a specific entity, Bluescope Steel, in relation to certain refractory cement goods. This instrument, made by the Chief Executive Officer of Customs, facilitates the application of a lower rate of customs duty on these goods as specified in the Customs Tariff Act 1995. The application of this Instrument is contingent on the CEO's determination that no substitutable goods are produced in Australia at the time the application was lodged, ensuring that the concession does not undermine local production. The geographic reach of this legislation is national, applying across Australia and governed by Commonwealth law. The Instrument does not extend or restrict application through subordinate instruments but is bound by the stipulations of the Customs Act 1901 and the Customs Tariff Act 1995. There are no stated exclusions or exemptions in the text, and the threshold for applying is met if no substitutable goods are produced in Australia. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before the date of registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0908198 under the Customs Act 1901 revolve around the process of applying for and granting Tariff Concession Orders (TCOs) (sections 269F, 269C, 269B, and 269P). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. The CEO must then determine if the application meets the core criteria set out in section 269C. This requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269B). If these criteria are satisfied, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations and requirements imposed by the Act on the parties it governs include the process for applying for a TCO and the criteria the CEO must assess. An applicant must submit an application to the CEO, who must then ensure that the application is not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO. The CEO must then assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO must issue a written TCO. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In the case of TCO No. 0908198, no such submissions were received.
The Act also outlines the consequences for breaches, although specific offences and penalties are not detailed in the explanatory statement. Generally, under the Customs Act 1901, breaches of the Act or Regulations can result in civil or criminal penalties. Civil penalties might include fines, while criminal penalties can include imprisonment, reflecting the severity of non-compliance. The explanatory statement does not provide specific maximum penalties for this particular TCO but indicates that the TCO does not affect the rights of any person as at the date of registration to disadvantage that person or impose liabilities for actions taken before the TCO was registered. This means that any rights or liabilities accrued before the TCO's effective date remain unaffected.