EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014274
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 pressure relief valves on 23 March 2010.
Instrument
TCO No 1014274 was made on 11 June 2010. It declares that those certain pressure relief valves 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. 1014274 is taken to have come into force on 23 March 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 Tariff Concession Instrument No. 1014274, enacted in 2010 under the Customs Act 1901, addresses the need to facilitate the import of goods that are not produced in Australia and for which there are no substitutable domestic products. This instrument was introduced to provide tariff concessions that reduce customs duty on specified goods, in this case, certain pressure relief valves. The instrument was issued by the Chief Executive Officer of Customs, acting on an application by Bluescope Steel, and was implemented to ensure that such goods benefit from a zero duty rate, aligning with the policy objective of promoting the efficient use of resources by allowing the importation of goods that cannot be domestically produced. The instrument also ensures that the rights of importers are protected, allowing them to seek duty refunds for imports made since the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which apply a lower rate of customs duty to goods. This legislation allows for the reduction of customs duty on goods for which an application has been made and approved by the CEO. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia, ensuring that the concession benefits industries that rely on importing specific goods due to the absence of local production. The geographic scope of the Act is national, as it pertains to the Commonwealth of Australia and applies uniformly across its states and territories. The TCOs do not impose any liabilities on persons other than the Commonwealth and do not disadvantage existing rights. Moreover, the application of TCOs is not retroactive, meaning they do not affect rights or impose liabilities for actions taken prior to the TCO's effective date. The TCO No. 1014274, made in respect of certain pressure relief valves, exemplifies this process and has been effective from the date of application on 23 March 2010, providing a zero duty rate on these goods as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
Key Provisions
The Tariff Concession Instrument No. 1014274, under section 269F (1) of the Customs Act 1901, allows for the application of tariff concessions on certain goods. When Bluescope Steel applied for this concession on 23 March 2010, the process required the Chief Executive Officer of Customs (CEO) to determine whether the application met the core criteria stipulated in section 269C. Specifically, the CEO had to confirm that no substitutable goods were produced in Australia on the day the application was lodged. Upon finding that the application met these criteria, the CEO issued a written order, known as a Tariff Concession Order (TCO), as mandated by section 269P(3). This order, TCO No. 1014274, specifies that certain pressure relief valves are subject to the tariff concessions outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate for these valves being reduced from the general rate of 5% to free.
The Act imposes certain obligations on both the applicant and the CEO. For Bluescope Steel, the applicant, the primary obligation is to ensure that the application for a tariff concession is valid and meets the specified criteria. For the CEO, the obligations include accepting valid applications, determining whether they meet the core criteria, making a written order if the criteria are satisfied, and publishing a notice in the Gazette inviting any interested parties to submit reasons why the concession should not be granted. Section 269K(1) outlines this requirement for public consultation. In this instance, no submissions were received, allowing the process to proceed without further delay.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act can generally lead to civil or criminal penalties. The maximum penalties can include fines and imprisonment, depending on the nature and severity of the breach. In this specific case, the TCO does not affect the rights of any person other than the Commonwealth or impose any new liabilities on individuals, ensuring that only the intended beneficiaries, such as importers of the specified goods, benefit from the tariff concessions.