EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908211
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 blast furnace gunning mixtures on 11 March 2009.
Instrument
TCO No 0908211 was made on 29 May 2009. It declares that those certain blast furnace gunning 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. 0908211 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. 0908211, enacted in 2009, addresses the need to provide tariff concessions for specific goods under the Customs Act 1901. This Act, enacted by the Parliament of Australia, provides a framework for the application and consideration of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The primary objective of this legislation is to reduce the customs duty on certain goods when it is determined that no substitutable goods are produced in Australia, thereby encouraging importation and potentially lowering costs for businesses and consumers. The instrument was introduced to streamline the process by which importers can apply for and receive tariff concessions, ensuring that the economic benefits of such concessions are realised without imposing additional burdens or liabilities on importers or other stakeholders.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to persons or entities seeking to import goods that are not currently being produced in Australia, with the aim of benefiting from reduced customs duty rates. The CEO is mandated to consider applications for TCOs, provided the goods in question are not excluded by section 269SJ of the Act. If the application meets the core criteria outlined in sections 269C, 269B, and 269D, the CEO must issue a TCO, thereby applying a specified lower rate of duty as listed in Schedule 4 of the Customs Tariff Act 1995. This legislative framework ensures that importers of goods eligible for a TCO can potentially receive a refund of duty for imports made from the date the TCO is deemed to have come into effect. Importantly, the TCO does not adversely affect the rights of any party as of the date of registration, nor does it impose any new liabilities on individuals or entities other than the Commonwealth. The geographic scope of this Act is national, with the CEO's decisions impacting importers across Australia, as demonstrated by the case of Bluescope Steel's successful application for a TCO regarding certain blast furnace gunning mixtures.
Key Provisions
Section 269C of the Customs Act 1901 (the Act) specifies the core criteria that an application for a Tariff Concession Order (TCO) must meet. For the Chief Executive Officer of Customs (the CEO) to consider a TCO application valid, the applicant must demonstrate that, on the day the application was lodged, no goods that could replace the subject goods of the application were produced in Australia in the ordinary course of business. This is further defined by sections 269D and 269E of the Act, which provide meanings for 'goods produced in Australia' and 'ordinary course of business', respectively. Additionally, the term 'substitutable goods' is explained in section 269B of the Act, referring to goods produced in Australia that can be used for the same purpose as the goods in question.
The Act imposes several obligations on the CEO, as detailed in section 269F. If the CEO receives an application for a TCO and determines that it is not in respect of goods specified in section 269SJ, they must assess whether the application meets the core criteria set out in section 269C. If satisfied that the application does meet these criteria, the CEO is required to make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per subsection 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1).
Under the Customs Act 1901, there are potential consequences for failing to comply with the requirements of a TCO. While the explanatory statement does not explicitly outline specific offences or penalties, breaches of customs laws generally can lead to civil and criminal penalties. For example, knowingly or recklessly making a false statement in a customs document can result in a penalty of up to 10,000 penalty units, as stipulated in section 255B of the Act. Additionally, importing goods without the necessary permits or in violation of customs regulations can lead to penalties, including fines and potential imprisonment. The exact penalties depend on the nature and severity of the offence, as outlined in various sections of the Customs Act and the Crimes Act 1914.
In summary, the Customs Act 1901 sets out the process for the CEO to evaluate and approve TCO applications, ensuring that the goods in question are not replaceable by Australian-produced goods. The CEO must adhere to specific obligations, including assessing applications against the core criteria and publishing notices in the Gazette to allow for public input. Although the explanatory statement does not detail specific penalties for TCO non-compliance, general customs law violations can result in substantial fines and imprisonment.