EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927071
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 high temperature service steam pipes on 28 July 2009.
Instrument
TCO No 0927071 was made on 16 October 2009. It declares that those certain high temperature service steam 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. 0927071 is taken to have come into force on 28 July 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 Tariff Concession Instrument No. 0927071, enacted in 2009 under the Customs Act 1901, was introduced to provide a concession in the tariff for certain high temperature service steam pipes. This legislative instrument allows for the reduction of customs duty on these specific goods, which were not being produced in Australia at the time of application. The instrument was created in response to an application by Bluescope Steel, who sought the concession on the basis that no substitutable goods were being produced domestically, thus meeting the core criteria stipulated in section 269C of the Act. The policy objective of the Tariff Concession Order is to promote the importation of these goods by reducing the duty from the general rate of 5% to free, thereby benefiting the importers and potentially encouraging the use of these products in relevant industries.
The process for enacting this instrument involved the Chief Executive Officer of Customs assessing the application against the criteria outlined in the Customs Act, including the publication of a notice in the Gazette to invite submissions from interested parties, which did not occur in this instance. The Tariff Concession Order came into effect on the date the application was lodged, 28 July 2009, and it does not disadvantage any person by affecting their rights as at the date of registration or imposing any liabilities for actions taken prior to the registration. This instrument underscores the mechanism provided by the Customs Act for tariff concessions, aimed at facilitating trade by reducing the cost of importing certain specified goods.
Scope and Application
The Tariff Concession Instrument No. 0927071 applies to specific high temperature service steam pipes as defined in the Customs Act 1901. This legislation allows for the application of a lower rate of customs duty on these goods if certain criteria are met. The Act applies to any entity or individual seeking a tariff concession order (TCO) for these goods, provided the application is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The instrument was made by the Chief Executive Officer of Customs (CEO) after determining that no substitutable goods were produced in Australia and thus no party would be disadvantaged. The geographic reach of this legislation is national, as it pertains to customs duties across Australia, and it does not impose any liabilities on any person. The TCO affects the rights of importers beneficially by allowing them to apply for a refund of duty on goods imported since the day the TCO was taken to have come into force. The application of this Act may be extended or restricted through subordinate instruments, though the specifics of such instruments are not detailed in the explanatory statement.
Key Provisions
The primary sections relevant to the Tariff Concession Instrument No. 0927071 under the Customs Act 1901 (the Act) include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ and meets the core criteria, a TCO can be made under section 269C, which states that the application must meet the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as stipulated in section 269P(3). For example, in TCO No. 0927071, certain high temperature service steam pipes are subject to a duty-free rate as they are declared as goods to which item 50 of Schedule 4 applies.
The Act imposes certain obligations on the parties involved. The CEO must ensure that the application for a TCO is valid and meets the core criteria. The CEO is also required to publish a notice in the Gazette, inviting submissions from any person who considers there are reasons why the TCO should not be made, as per subsection 269K(1). The CEO did not receive any submissions in response to the notice published for TCO No. 0927071. Additionally, the TCO is taken to have come into force on the day the application was lodged, as outlined in subsection 269S(1). This ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO came into force, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. Although the explanatory statement does not detail specific offences or penalties, it is important to note that breaches of the Act or associated regulations could lead to civil or criminal consequences. The maximum penalties for breaches may vary depending on the nature and severity of the offence. For instance, under the Customs Act, penalties can include fines and imprisonment, with specific amounts and terms defined in other sections of the Act and related regulations. Importers and other parties must ensure compliance to avoid potential legal repercussions.