EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943497
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 tubes on 17 November 2009.
Instrument
TCO No 0943497 was made on 22 January 2010. It declares that those certain seamless tubes 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. 0943497 is taken to have come into force on 17 November 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. 0943497 was enacted in 2010 under the Customs Act 1901 to address the issue of providing tariff concessions for specific goods that are not produced in Australia and for which no suitable substitute is available domestically. This instrument was introduced to facilitate the application process for tariff concessions as outlined in Part XVA of the Customs Act 1901. The enacting body responsible for this instrument is the Chief Executive Officer of Customs, who is mandated to make decisions on tariff concession orders based on the core criteria specified in the Act. The policy objective behind this instrument is to ensure that Australian businesses are not unfairly disadvantaged by the imposition of customs duties on goods that are not locally produced, thereby supporting economic efficiency and competitiveness.
This instrument was made following an application by Bluescope Steel for tariff concessions on certain seamless tubes. The CEO of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a tariff concession. Consequently, Instrument No. 0943497 was issued, declaring that the seamless tubes in question would be subject to a duty rate of free, down from the general rate of 5%. The instrument came into effect on the date the application was lodged, 17 November 2009, and no submissions were received in opposition to the concession. Importantly, the tariff concession does not adversely affect the rights of any person other than the Commonwealth and does not impose any new liabilities, potentially benefiting importers by allowing them to apply for duty refunds on imports made since the concession took effect.
Scope and Application
The Tariff Concession Instrument No. 0943497, which was made under the Customs Act 1901, applies specifically to seamless tubes that Bluescope Steel sought tariff concessions for. This instrument is a mechanism by which the Chief Executive Officer of Customs can reduce the rate of customs duty on certain goods, provided the application meets the core criteria stipulated in the Act. The Act applies to any person or entity that applies for such tariff concessions on goods, ensuring that the goods are not substitutable by Australian-made products and are not excluded under section 269SJ. The geographic reach of this Act is national, as it is a Commonwealth legislation. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person in respect of actions taken prior to the tariff concession order's registration. The commencement of the TCO is deemed to be from the date the application was lodged, in this case, 17 November 2009. Any exclusions or exemptions from the application of this Act are strictly defined within the Act itself and the associated regulations. The scope of the Act may be extended or restricted through subordinate instruments, which must align with the overarching provisions of the Customs Act 1901.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0943497 (F2010L01279) revolve around the granting of tariff concessions under the Customs Act 1901. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. This application process is contingent upon the goods not being specified in section 269SJ of the Act, which lists goods that are ineligible for TCOs. Section 269C stipulates that a TCO application is eligible if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269B respectively.
The obligations imposed on parties by this legislation primarily concern the CEO of Customs. Once an application is deemed valid, the CEO must make a written TCO if satisfied that the application meets the core criteria (section 269P(3)). Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be granted. This ensures transparency and provides an opportunity for public input before the decision is finalised. The CEO must also ensure that the rights of individuals are not adversely affected by the issuance of the TCO, as outlined in section 269S(1).
In terms of legal consequences, the Act does not explicitly outline offences or penalties for breaches related to the issuance or application of TCOs. However, any actions taken in reliance on a TCO that is later found to be improperly granted could potentially lead to civil or administrative consequences. The Act ensures that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date (section 269S(1)). Importers may benefit by applying for a refund of duty on goods imported since the TCO was deemed to have come into force under paragraph 126(1)(r) of the Regulations.