EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908202
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 insulating mixtures on 11 March 2009.
Instrument
TCO No 0908202 was made on 29 May 2009. It declares that those certain gunning insulating 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. 0908202 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 Australian Parliament, was designed to regulate the import and export of goods, including the imposition of customs duty on goods entering the country. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 0908202, made on 29 May 2009, applies to certain gunning insulating mixtures, granting them a free rate of duty as opposed to the general rate of 5%. The instrument was introduced following an application by Bluescope Steel, and after satisfying the core criteria outlined in section 269C of the Act, including the absence of substitutable goods produced in Australia. The policy objective is to facilitate the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be made to provide lower rates of customs duty on specific goods. These orders apply to any goods specified in the TCO and are made by the Chief Executive Officer of Customs (CEO) when certain criteria are met, such as the absence of substitutable goods produced in Australia. The application of TCOs is limited to goods that are not specified in section 269SJ of the Act, which excludes certain types of goods from being subject to a TCO. The geographic and jurisdictional reach of the Act is national, as it applies across Australia, governed by the Commonwealth. The Act allows for the extension or restriction of its application through subordinate instruments, which are made in accordance with the provisions of the Customs Act. The Tariff Concession Instrument No. 0908202, for instance, was created to provide tariff concessions on certain gunning insulating mixtures, reducing the duty rate from 5% to free, and was effective from the date the application was lodged, 11 March 2009. This particular TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The primary sections of the Customs Act 1901 relevant to this Tariff Concession Instrument are sections 269C, 269B, 269E, and 269P. Section 269C (2) specifies the core criteria that an application for a Tariff Concession Order (TCO) must meet, primarily that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines terms such as 'goods produced in Australia' and 'ordinary course of business', while section 269E provides the definition for 'ordinary course of business'. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they are required by section 269P(3) to issue a written order, the TCO, declaring that the goods in question are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes certain obligations on both the applicant and the CEO. For the applicant, the obligation is to ensure that their application for a TCO is made in accordance with the requirements of the Act, specifically that the goods in question meet the core criteria outlined in section 269C. The CEO, on the other hand, has the obligation to assess the application against these criteria and, if satisfied, to make the TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who may have objections to the TCO to submit their concerns. This is outlined in section 269K(1). In this instance, the CEO did not receive any submissions in response to the notice.
The Customs Act 1901 outlines potential consequences for breaches of its provisions. Although the specific consequences for non-compliance with TCOs are not detailed in the explanatory statement, the Act generally provides for both civil and criminal penalties for breaches. These can include fines and imprisonment, the specifics of which would be determined by the particular breach and the applicable laws. The explanatory statement does not provide information on maximum penalties for breaches related to TCOs.
The Tariff Concession Instrument No. 0908202, which applies to certain gunning insulating mixtures, has specified that these goods are subject to a free rate of duty rather than the general rate of 5%. This concession is effective from 11 March 2009, the date the application was lodged, and does not affect the rights of any person as at the date of registration. Importers of these goods will be able to apply for a refund of duty on goods imported since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person.