EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922179
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 rolled steel on 29 June 2009.
Instrument
TCO No 0922179 was made on 18 September 2009. It declares that those certain hot rolled 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. 0922179 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 was enacted by the Parliament of Australia to provide a comprehensive framework for the regulation of customs duties and other import and export-related matters. One of the mechanisms introduced to address specific economic or industry-related issues is the Tariff Concession Order (TCO), which allows for a lower rate of customs duty on certain goods. This instrument is designed to support industries by reducing the cost of imported materials, thereby fostering competitiveness and potentially lowering the cost of goods for consumers. The Tariff Concession Instrument No. 0922179 was introduced to provide tariff concessions on certain hot rolled steel, responding to an application from Bluescope Steel. The instrument was enacted to address the gap in the availability of competitively priced steel products in Australia by ensuring that no substitutable goods were being produced locally, thereby justifying the concession under the Act’s provisions.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply a lower rate of customs duty to goods specified within them. Any person can apply for a TCO for goods, provided the application does not relate to goods that are explicitly excluded under section 269SJ of the Act. The CEO must assess whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. If the criteria are satisfied, the CEO is obligated to make a written order, which declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO’s application does not retroactively affect the rights of any person, except for the Commonwealth, thus preserving their rights and imposing no new liabilities. Instead, it potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0922179, made under section 269F of the Customs Act 1901, provides a lower rate of customs duty for certain hot rolled steel. According to section 269F, an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application meets the core criteria, as outlined in sections 269C and 269P(3), they must make a TCO. For Bluescope Steel's application, the CEO was satisfied that no substitutable goods were produced in Australia, so the TCO was made, effective from 29 June 2009, the day the application was lodged.
The obligations imposed by the Act on the parties primarily involve the application process and the CEO's decision-making. The applicant must ensure their application meets the criteria set out in section 269C of the Act. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting submissions from any person who may have reasons to oppose the TCO, as per section 269K(1). In this case, the CEO did not receive any submissions in response to the published notice. Upon making the TCO, the CEO must also ensure that the order is published in the Gazette, as per section 269S(1).
Failure to comply with the provisions of the Customs Act 1901 can result in civil or criminal penalties. Although the explanatory statement does not specify penalties for non-compliance with the TCO provisions, breaches of the Customs Act generally can lead to penalties under section 221 of the Act. The penalties can include fines and imprisonment. For example, under section 221, the maximum penalty for knowingly making a false statement or representation in relation to customs or excise matters is 12 months imprisonment or a fine of 120 penalty units, or both, for an individual, and up to 7,500 penalty units for a body corporate. However, the specific penalties for non-compliance with the TCO provisions would depend on the nature and severity of the breach.