EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0935634
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 seamless pipes on 22 September 2009.
Instrument
TCO No 0935634 was made on 04 December 2009. It declares that those certain seamless pipes 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. 0935634 is taken to have come into force on 22 September 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 Australian Parliament, establishes a framework for administering customs duties and other import charges, as well as providing for tariff concession orders (TCOs) under Part XVA. This part was introduced to address the need for tariff concessions to ensure that Australian industries remain competitive by allowing for the importation of goods at lower duty rates when no suitable domestic alternatives exist. Specifically, Tariff Concession Instrument No. 0935634, made under the Customs Act, was introduced to provide tariff concessions for certain seamless pipes imported by Bluescope Steel, recognising the lack of substitutable goods produced in Australia. The instrument aims to benefit the rights of importers by allowing them to apply for refunds of duty on goods imported since the TCO came into effect on the date of the application, without imposing any new liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0935634 under the Customs Act 1901 applies to specific seamless pipes, which are subject to the Customs Tariff Act 1995. The instrument was created following an application by Bluescope Steel on 22 September 2009. The Chief Executive Officer of Customs, after verifying that no substitutable goods were produced in Australia and that the application met the core criteria, issued a Tariff Concession Order (TCO) on 4 December 2009. This TCO grants a concession, reducing the duty on the specified seamless pipes from the general rate of 5% to a duty-free rate. The application of this instrument is national in scope, as it pertains to the federal customs laws of Australia. However, it does not extend to goods that are specified in section 269SJ of the Customs Act, which are ineligible for tariff concessions. Additionally, the TCO does not affect the rights of any person as at the date of registration and does not impose liabilities on any person, thereby ensuring that existing rights and obligations are preserved. The TCO came into effect on the date the application was lodged, which was 22 September 2009, and it allows importers to apply for a refund of duty on goods imported since that date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0935634, under the Customs Act 1901, concern the making of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO) for specific goods (s 269C, s 269F). A TCO can be applied for by any person under section 269F of the Act, and if the CEO is satisfied that the application meets the core criteria, they are required to make a written order declaring that the goods in question are subject to the specified tariff concessions (s 269P(3)). The instrument, TCO No. 0935634, was made on 4 December 2009 and declared that certain seamless pipes are subject to the tariff concessions outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must decide whether an application for a TCO meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business (s 269C). The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (s 269K(1)). Furthermore, any person who believes they are adversely affected by the TCO has the right to seek a review of the decision under the Administrative Appeals Tribunal Act 1975.
Failure to comply with the requirements set out in the Customs Act 1901 may result in various consequences. If a person contravenes a provision of the Act, they may be subject to penalties. Under section 283 of the Act, a person who knowingly or recklessly makes a false or misleading statement in an application for a TCO may be guilty of an offence. The maximum penalty for such an offence is 2,500 penalty units or imprisonment for five years, or both. Additionally, any person who suffers loss or damage due to the CEO's failure to comply with the Act may be entitled to compensation under section 284 of the Act.