EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922187
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 Pty Ltd applied for a TCO in respect of certain zinc coated steel on 29 June 2009.
Instrument
TCO No 0922187 was made on 18 September 2009. It declares that those certain zinc coated 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. 0922187 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 Australian Parliament and includes provisions that allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). These orders apply lower rates of customs duty to specific goods. The Customs (Tariff Concession) Order No. 0922187, introduced under this Act, addresses the need for tariff concessions for certain zinc-coated steel products. This specific order was made in response to an application by Bluescope Steel Pty Ltd, which sought a tariff concession due to the absence of substitutable goods produced in Australia. The order was published in the Gazette, inviting public submissions, although none were received. The tariff concession aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the order, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders can apply lower rates of customs duty to specific goods, subject to certain conditions and criteria. An entity or individual can apply for a TCO concerning particular goods, provided that the application is not in respect of goods explicitly excluded under section 269SJ. The CEO must assess whether the application meets the core criteria, which are primarily determined by the absence of substitutable goods being produced in Australia at the time of application. If the CEO determines that no such substitutable goods exist, the application is likely to be approved, leading to the creation of a TCO that applies a reduced customs duty rate to the specified goods. The legislation also includes provisions for consultation and public notice, ensuring transparency in the process. This Act applies nationally across Australia and its territories, governed by the Commonwealth, and any TCOs made under this Act are subject to further regulation and administrative adjustments through subordinate instruments.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0922187 (TCO No. 0922187) under the Customs Act 1901 (section 269C) include provisions that establish a lower rate of customs duty for certain goods that are subject to a Tariff Concession Order (TCO). Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced rate of duty. In this instance, the CEO determined that Bluescope Steel Pty Ltd's application for certain zinc coated steel met these criteria, and the TCO was issued, reducing the duty rate from the general 5% to free.
The obligations imposed by the Act on the parties involved include the requirement for applicants to ensure their applications meet the core criteria set out in section 269C, which mandates that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made. In this case, the CEO published such a notice and did not receive any submissions in response.
Failing to comply with the requirements of the Act or breaching the conditions of a TCO may lead to various consequences. Under section 277, penalties can include fines and imprisonment. For example, subsection 277(1) states that a person who contravenes a provision of the Act can be fined up to 10,000 penalty units or imprisoned for up to five years, or both, for each offence. Additionally, subsection 277(2) specifies that corporate entities can be fined up to 50,000 penalty units for each offence. These penalties are designed to ensure compliance and enforce the provisions of the Customs Act 1901.