EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939596
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 Limited applied for a TCO in respect of certain steel coil on 21 October 2009.
Instrument
TCO No 0939596 was made on 08 January 2010. It declares that those certain steel coil 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. 0939596 is taken to have come into force on 21 October 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 framework for the administration of customs duties and the regulation of imports and exports. One of the specific provisions under this Act is the ability to issue Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, aimed at addressing situations where certain goods should be exempt from standard customs duties. Enacted to address gaps in the customs duty regime, this provision ensures that specific goods, where no substitutable domestic product exists, can be imported without incurring the usual duty rates. This was introduced to promote fair trade practices and to support industries that do not have local alternatives. The Tariff Concession Instrument No. 0939596, for instance, was made to provide a zero-duty rate for certain steel coils, acknowledging the absence of substitutable Australian-produced goods. This legislative tool helps in maintaining competitive pricing and supporting industrial sectors reliant on imported materials.
Scope and Application
The Tariff Concession Instrument No. 0939596 applies specifically to the application of tariff concessions to certain steel coil goods, as submitted by Bluescope Steel Limited under the Customs Act 1901. This Act allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument is designed to provide tariff relief to the importer of the specified steel coil, thereby reducing the duty rate from the general 5% to free. The application of the TCO is limited to the goods specified in the order and does not extend to other goods or persons not included in the application. Jurisdictionally, this Act operates under the Commonwealth of Australia, and its effects are applicable nationwide. The scope of the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the TCO was registered. The application process requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties, though in this case, no submissions were received. The TCO is effective as of the date the application was lodged, in this instance, 21 October 2009.
Key Provisions
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0939596, outlines a process for the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) to lower customs duty rates for specified goods (s 269F). An application for a TCO must be lodged by a person and must not concern goods that are ineligible under section 269SJ of the Act. To be approved, an application must meet the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Definitions pertinent to these criteria, such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', are provided in sections 269D, 269E and 269F of the Act, respectively.
The obligations imposed by the Act on the CEO include assessing the validity of TCO applications against the specified criteria and making a decision accordingly. If satisfied, the CEO must issue a written order (TCO) as mandated by subsection 269P(3) of the Act. This order declares the goods in question to be subject to a prescribed rate of duty as specified in Schedule 4 to the Customs Tariff Act 1995. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from interested parties on the proposed TCO. In this case, no submissions were received, which means the CEO proceeded with the grant of the TCO (s 269K(1)).
Section 269S(1) of the Act stipulates that a TCO takes effect on the date the application was lodged, in this instance, 21 October 2009. The TCO does not affect any rights or liabilities of persons, except for potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. The Act ensures that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's registration. In this context, Bluescope Steel Limited's application for a TCO concerning certain steel coil resulted in the goods being subject to a duty rate of free, down from the general rate of 5%.