EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908207
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 heat transfer ramming mixtures on 11 March 2009.
Instrument
TCO No 0908207 was made on 29 May 2009. It declares that those certain heat transfer ramming 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. 0908207 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. 0908207, enacted in 2009, is an instrument under the Customs Act 1901 designed to provide tariff concessions for specific goods. This instrument was introduced to address the need for lower customs duty rates for certain imported goods, thereby enhancing the competitiveness of Australian businesses by reducing the cost of importing these goods. Enacted by the Parliament of Australia, the policy objective behind this legislation is to ensure that Australian industries can access essential materials at a reduced cost, which in turn can support economic growth and competitiveness. The instrument provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. This initiative reflects a broader policy goal of fostering a favourable environment for trade and industry within Australia.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), facilitates the application of a lower rate of customs duty to specific goods, provided certain criteria are met. The application of a TCO applies to entities or individuals who seek to import goods that are not produced in Australia and are not of a type listed in section 269SJ of the Act as ineligible for such concessions. The scope of this legislation is national, extending across the Commonwealth of Australia. Notably, a TCO does not retroactively affect the rights of any person, ensuring that only future transactions are subject to the reduced duty rates. The TCO No. 0908207, for instance, was issued to Bluescope Steel for certain heat transfer ramming mixtures, resulting in a duty rate of free instead of the general rate of 5%. The application process involves the Chief Executive Officer of Customs assessing the eligibility of the goods against the core criteria and publishing notices for public submissions, though in this case, no objections were raised. The TCO becomes effective from the date the application was lodged, providing immediate benefit to importers who can apply for duty refunds on goods imported since the commencement date of the TCO.
Key Provisions
The Tariff Concession Order (TCO) No. 0908207 under the Customs Act 1901 (section 269F) allows for a concession on the customs duty rate for certain heat transfer ramming mixtures. The CEO of Customs must ensure that the application for a TCO is not in respect of goods specified in section 269SJ before deciding whether the application meets the core criteria set out in section 269C. For the CEO to be satisfied that the core criteria are met, it must be determined that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms such as ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’ are provided in sections 269D, 269E and 269B respectively.
The Customs Act 1901 imposes specific obligations on the CEO of Customs when processing a TCO application. Once the application is accepted as valid, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions in response to the notice. The Act also requires that the TCO be taken to have come into force on the day on which the application for the TCO was lodged, meaning that TCO No. 0908207 is considered to have come into force on 11 March 2009.
Section 269P(3) of the Customs Act 1901 requires the CEO to make a written order if satisfied that the application meets the core criteria. In this instance, the CEO made TCO No. 0908207, declaring that certain heat transfer ramming mixtures are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, as no substitutable goods were being produced in Australia. This results in the general rate of duty on these goods being reduced from 5% to free. The TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person.
The Customs Act 1901 provides for civil and criminal penalties for breaches of the Act and its regulations. However, the Explanatory Statement for TCO No. 0908207 does not specify any offences, penalties, or consequences for breach of the TCO. It is important to note that the absence of specified penalties does not mean that there are no legal repercussions for non-compliance with the Act or the TCO. The standard penalties for breaches of the Customs Act 1901 include fines and imprisonment, with the specific penalties depending on the nature and severity of the breach.