EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922178
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 cold rolled or cold reduced steel on 29 June 2009.
Instrument
TCO No 0922178 was made on 18 September 2009. It declares that those certain cold rolled or cold reduced steel 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. 0922178 is taken to have come into force on 29 June 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 Parliament of Australia, was designed to provide a framework for the administration of customs and excise, including the regulation of the importation and exportation of goods. One of the key mechanisms within this framework is the provision for Tariff Concession Orders (TCOs) under Part XVA of the Act, which allow for reduced customs duty rates on specified goods. This was introduced to address the need for flexible and responsive tariff measures that could accommodate specific economic and trade policy needs without requiring amendments to primary legislation. The policy objective behind the TCO mechanism is to support Australian industries by making imported goods more competitive, thus encouraging local production and consumption of these goods where feasible. The explanatory statement for Tariff Concession Instrument No. 0922178, made on 18 September 2009, details the application by Bluescope Steel for a TCO concerning certain cold rolled or cold reduced steel, which was granted after the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria under section 269C of the Act.
Scope and Application
The Tariff Concession Instrument No. 0922178 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), specifically certain cold rolled or cold reduced steel. This instrument operates within the jurisdiction of the Commonwealth of Australia, and it is administered by the Chief Executive Officer of Customs. The TCO is applicable to goods for which an application has been made and approved by the CEO, provided the goods do not fall under the categories specified in section 269SJ of the Act, which includes certain types of goods that cannot be subject to a TCO. The application of the TCO is contingent on the CEO determining that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C of the Act. The instrument effectively reduces the duty rate on the specified goods from 5% to free, benefiting importers who can apply for a refund of duty on these goods imported since the date the TCO is deemed to have come into force, as per the Customs Tariff Act 1995. Importantly, the TCO does not adversely affect the rights of any person, nor does it impose any liabilities on individuals or entities other than the Commonwealth in relation to actions taken prior to the TCO’s effective date.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0922178 under the Customs Act 1901 (section 269C, 269B, and 269S) detail the process and criteria for granting Tariff Concession Orders (TCOs) for specific goods. A TCO allows for a lower rate of customs duty on goods, provided the Chief Executive Officer of Customs (CEO) determines that the goods in question are not produced in Australia in the ordinary course of business and are not substitutable goods (section 269D, 269E). In this case, the CEO made TCO No. 0922178 for certain cold rolled or cold reduced steel on 18 September 2009, following an application by Bluescope Steel on 29 June 2009, as no substitutable goods were being produced in Australia at the time. The TCO specifies that these goods will now attract a duty rate of free, as opposed to the general rate of 5%.
The obligations imposed on parties by this legislation require the CEO to assess applications for TCOs against the core criteria set out in the Customs Act. Specifically, the CEO must ensure that the goods in question are not produced domestically and are not substitutable, and if satisfied, must issue a TCO (subsection 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as valid (subsection 269K(1)). In this instance, no submissions were received in response to the published notice.
In terms of legal consequences, the Act does not explicitly state any specific offences or penalties for breaches related to TCOs. However, the general legal framework of the Customs Act 1901 would apply to any breaches, including potential civil or criminal penalties for non-compliance with customs regulations. It is important to note that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, and it does not impose any liabilities on any person (subsection 269S(1)). Importers of the affected goods will benefit from being able to apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.