Overview

The Customs Act 1901, enacted by the Australian Parliament, outlines a framework under which Tariff Concession Orders (TCOs) can be implemented to lower the customs duty on specific goods. This Act was introduced to address the need for a mechanism to provide tariff relief for goods that are not produced domestically, thus preventing any competitive disadvantage to domestic producers. Section 269F of the Act allows for applications to the Chief Executive Officer of Customs (CEO) for such concessions, provided the goods in question do not fall under the prohibitions specified in section 269SJ. Tariff Concession Instrument No. 0912739 was introduced on 3 July 2009, following an application by Bluescope Steel Limited for a TCO on certain assemblies of baghouse fan blast furnaces, where it was determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for such concessions. The policy objective is to enable the importation of these specific goods at a reduced duty rate, which is set at zero percent, while maintaining a general rate of 5% on similar goods.

Scope and Application

The Customs Act 1901, through Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), who has the authority to reduce the rate of customs duty on certain goods. This process applies to any person or entity that can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C, 269D, 269E, and 269SJ of the Act. This legislation operates on a Commonwealth level, providing a streamlined process for reducing tariff rates on specific imported goods, as demonstrated by TCO No. 0912739 for certain assemblies baghouse fan blast furnaces, which was granted to Bluescope Steel Limited on 3 July 2009. The application of a TCO is contingent on the CEO being satisfied that the application meets the core criteria, and the process is subject to public consultation, although in this instance, no submissions were received. The application of the TCO does not affect pre-existing rights or impose new liabilities, and it may entitle importers to a refund of duties paid on eligible goods imported since the effective date of the TCO.

Key Provisions

The key sections of the Tariff Concession Instrument No. 0912739 under the Customs Act 1901 are sections 269C, 269B, 269E, and 269P(3) (269C, 269B, 269E, 269P(3)). These sections establish the criteria for a Tariff Concession Order (TCO) to be made by the Chief Executive Officer of Customs (CEO). Specifically, section 269C (269C) states that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. This is defined by section 269B (269B) and section 269E (269E), which clarify the terms "goods produced in Australia" and "ordinary course of business." If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff) (269P(3)). The obligations and requirements imposed by the Act on the parties involved are primarily on Bluescope Steel Limited, the applicant for the TCO, and the CEO of Customs. Bluescope Steel Limited must ensure that their application for a TCO is complete and meets the core criteria outlined in the Act. The CEO is required to review the application, determine if it meets the core criteria, and if so, make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, which was done in this case without any submissions being received. Under the Act, if the CEO fails to follow the prescribed procedures for making a TCO, or if an entity acts in a way that contravenes the Act, there are potential civil or criminal consequences. However, the Act does not specify particular offences or penalties for failure to comply with the TCO provisions. Generally, breaches of the Customs Act 1901 can lead to penalties, including fines and imprisonment, depending on the severity of the breach. In this case, as no submissions were received against the TCO, it is assumed that all procedural requirements were met, and no breaches occurred. The Tariff Concession Instrument No. 0912739, made on 3 July 2009, declares that certain assemblies of baghouse fan blast furnaces are goods to which item 50 of Schedule 4 to the Tariff applies. This concession reduces the duty on these goods from the general rate of 5% to free. The TCO came into force on 17 April 2009, the date the application was lodged. Importantly, the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken before the registration date. Importers, however, will benefit as they can apply for a refund of duty on goods imported since the TCO came into force.