EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048785
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 (AIS) Pty Ltd applied for a TCO in respect of certain refractory binders on 02 November 2010.
Instrument
TCO No 1048785 was made on 24 January 2011. It declares that those certain refractory binders 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. 1048785 is taken to have come into force on 02 November 2010.
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 under which Tariff Concession Orders (TCOs) can be issued to provide relief from customs duty on certain goods. The Act addresses the need for a streamlined process to facilitate trade by reducing the cost of imported goods through tariff concessions. TCO No. 1048785, made on 24 January 2011, is an example of this mechanism in action, providing a tariff concession for specific refractory binders by Bluescope Steel (AIS) Pty Ltd. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for a TCO under section 269C of the Act. Consequently, the general duty rate of 5% was reduced to free for the specified goods, effective from the date of the application, 2 November 2010. This concession is intended to benefit importers by potentially allowing them to claim a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty to certain goods. This process is applicable to any person or entity seeking to import goods that are not already being produced in Australia and for which a TCO can be applied. The scope of this Act is national, applying across Australia and governed by the Commonwealth. Exclusions include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act allows for the extension and restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995, which details the tariff rates applicable to various goods. In the case of Bluescope Steel (AIS) Pty Ltd, a TCO was issued for certain refractory binders on 24 January 2011, following an application on 02 November 2010, after the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria. The TCO has a retroactive effect, being considered effective from the date of the application, without affecting any pre-existing rights or liabilities of parties other than the Commonwealth.
Key Provisions
The key operative sections of the Customs Act 1901, relevant to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C stipulates that for the CEO to consider making a TCO, the application must meet core criteria, which primarily means that no substitutable goods were produced in Australia on the date the application was lodged (section 269C(2)). Section 269P requires the CEO to make a written TCO if satisfied that the application meets these criteria.
The obligations imposed by the Act on the parties involved include the CEO’s duty to assess the TCO application against the core criteria (section 269C) and to make a written TCO if these criteria are met (section 269P). The CEO must also publish a notice in the Gazette inviting submissions from any person who might have reasons why the TCO should not be made (subsection 269K(1)). The applicant, in this case Bluescope Steel (AIS) Pty Ltd, must ensure their application provides all necessary information and meets the legislative criteria to qualify for a TCO.
Breaching the provisions of the Customs Act 1901 related to TCOs can lead to civil or criminal consequences, depending on the nature and intent of the breach. For example, making a false or misleading statement in a TCO application could result in penalties under section 278 of the Act, which provides for fines and imprisonment. The maximum penalty for knowingly making a false statement in connection with a customs matter can be up to two years imprisonment or a fine of up to 10,000 penalty units, or both, as outlined in the Crimes Act 1914. Additionally, any failure to comply with the notice requirements under subsection 269K(1) might also attract administrative penalties under the Administrative Penalties (Customs) Regulations 1995.