EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0948792
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.
Onesteel applied for a TCO in respect of certain refractory roofing electric arc furnaces on 15 December 2009.
Instrument
TCO No 0948792 was made on 05 March 2010. It declares that those certain refractory roofing electric arc furnaces 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. 0948792 is taken to have come into force on 15 December 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 aims to provide a framework for the administration of customs and excise duties. The Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which reduce the rate of customs duty on certain goods, provided specific criteria are met. This scheme was introduced to address the problem of ensuring that Australian industries remain competitive by potentially lowering the cost of importing specific goods. Instrument No. 0948792, issued under this Act, provides a tariff concession for certain refractory roofing electric arc furnaces, allowing them to be imported free of duty. This measure was taken as no substitutable goods were being produced in Australia at the time of the application, aligning with the policy objective to support industries where local production does not exist.
Scope and Application
The Tariff Concession Instrument No. 0948792, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain refractory roofing electric arc furnaces, and is administered by the Chief Executive Officer of Customs. The instrument extends its application to any person or entity seeking a tariff concession order for these goods, provided the application meets the core criteria outlined in the Act. The primary geographic scope of this legislation is national, as it operates within the framework of the Australian Customs Act. The TCO is effective from the date the application was lodged, 15 December 2009, and provides a lower rate of customs duty for the specified goods, in this instance, a rate of free duty as opposed to the general rate of 5%. The instrument does not affect any pre-existing rights of persons other than the Commonwealth and does not impose any liabilities on any person. Furthermore, the instrument does not apply to goods specified in section 269SJ of the Act, which excludes certain types of goods from tariff concessions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO) (section 269F). An application for a TCO can be made by a person seeking a lower rate of customs duty on specified goods, provided these goods are not listed in section 269SJ, which details those ineligible for TCOs (section 269F). The CEO is required to evaluate whether the application meets the core criteria set out in section 269C, which is contingent on the absence of substitutable goods being produced in Australia at the time of application (section 269C). The definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively.
Under the Customs Act, the CEO must impose certain obligations on applicants seeking a TCO. These include ensuring that the application is for goods not listed in section 269SJ, and that the goods do not have substitutable counterparts produced in Australia at the time of application. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties who might oppose the TCO, although no such submissions were received in this case (subsection 269K(1)). The TCO itself must be made in writing and clearly specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (subsection 269P(3)).
The Customs Act 1901 outlines specific consequences for breaches of its provisions. Although the explanatory statement does not detail specific offences related to TCOs, general penalties for breaches of the Customs Act can include substantial fines and imprisonment. For example, under section 258 of the Act, the maximum penalty for serious breaches can reach up to 10,000 penalty units, or in the case of a corporation, 50,000 penalty units. Furthermore, civil penalties and criminal charges may apply for non-compliance with customs duties and other provisions of the Act, with the exact penalties varying based on the nature and severity of the breach.