EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908206
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 hot blast gunning insulating mixtures on 11 March 2009.
Instrument
TCO No 0908206 was made on 29 May 2009. It declares that those certain hot blast 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. 0908206 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. 0908206 was enacted under the Customs Act 1901 to address the need for tariff concessions for specific goods, in this case, certain hot blast gunning insulating mixtures, which were subject to application by Bluescope Steel. This instrument was introduced to provide a lower rate of customs duty for these goods, thereby making them more competitively priced in the Australian market. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with section 269F of the Act, and it came into effect on the date the application was lodged, 11 March 2009. The policy objective of this concession is to support Australian industries by ensuring that certain goods, which are not produced domestically, are subject to a reduced customs duty, thus preventing potential disadvantages to businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0908206 under the Customs Act 1901 applies to Bluescope Steel's application for tariff concession orders (TCO) for certain hot blast gunning insulating mixtures, which are subject to specific conditions as outlined in the Act. The CEO of Customs must decide whether the application meets the core criteria, particularly if no substitutable goods are produced in Australia in the ordinary course of business. Once approved, the TCO allows for a reduction in the rate of customs duty from the general rate of 5% to free, effective from the date the application was lodged, which in this case is 11 March 2009. The application of this TCO does not disadvantage any person other than the Commonwealth nor impose any liabilities on any person for actions taken prior to the registration of the TCO. This instrument does not extend beyond its specific application to the goods mentioned, and no submissions were received in response to the CEO's invitation for objections.
Key Provisions
The Customs Act 1901 provides a framework for the application and administration of Tariff Concession Orders (TCOs) under Part XVA, as detailed in sections 269C, 269F, and 269P. Section 269F enables a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods, provided these goods are not listed in section 269SJ, which outlines those goods ineligible for a TCO. If the CEO determines that the application meets the core criteria set out in section 269C, they are required to issue a TCO. This core criterion necessitates that, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. A substitutable good, according to section 269B, is a product made in Australia that serves the same use or design purpose as the goods specified in the TCO application. Upon meeting these criteria, section 269P(3) mandates the CEO to issue a written TCO order specifying the prescribed item in Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations under this legislation primarily fall on the CEO of Customs, who must assess applications for TCOs and decide whether they meet the core criteria. This involves determining if substitutable goods are produced in Australia on the application date. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons against the TCO, as outlined in subsection 269K(1). Additionally, once a TCO is issued, importers can apply for a refund of duty on goods imported since the TCO's effective date, as stipulated under paragraph 126(1)(r) of the Regulations.
Non-compliance with the requirements set forth in the Customs Act 1901 and the subsequent TCOs can result in various legal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can lead to civil or criminal penalties. For instance, offences under the Customs Act can result in fines and imprisonment, with the severity depending on the nature and extent of the violation. The maximum penalties for serious offences can be substantial, reflecting the importance of adhering to customs laws and regulations.
In summary, the Customs Act 1901, through its provisions in Part XVA, facilitates the application and issuance of Tariff Concession Orders by the CEO of Customs. These orders lower customs duty rates on specified goods, provided they meet the core criteria and no substitutable goods are produced in Australia. The CEO bears the responsibility of assessing applications, publishing notices, and issuing TCOs. The rights of importers are positively affected, allowing them to seek duty refunds for imported goods since the TCO's effective date. Non-compliance with the Act's provisions can lead to significant civil or criminal penalties.