EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014473
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 Ltd applied for a TCO in respect of certain continuous slab caster parts on 24 March 2010.
Instrument
TCO No 1014473 was made on 11 June 2010. It declares that those certain continuous slab caster parts 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. 1014473 is taken to have come into force on 24 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the regulation of customs duties and tariffs, including provisions for Tariff Concession Orders (TCOs). These orders allow for reduced customs duty rates on specific goods under certain conditions, as outlined in Part XVA of the Act. The Act was amended to introduce this scheme to facilitate trade and economic efficiency by potentially lowering the cost of importing certain goods. Tariff Concession Instrument No. 1014473 was introduced to address the need for tariff concessions on specific goods, such as continuous slab caster parts, which Bluescope Steel Ltd applied for on 24 March 2010. The instrument was enacted to provide a tariff concession, reducing the duty rate from the general rate of 5% to free, effective from the date the application was lodged, 24 March 2010. This measure aims to support the competitiveness of Australian industries by reducing the cost of importing necessary components.
Scope and Application
The Tariff Concession Instrument No. 1014473, made under the Customs Act 1901, applies to specific goods, namely certain continuous slab caster parts, and is administered by the Chief Executive Officer of Customs. The Act provides a framework for tariff concession orders (TCOs) that allow for reduced customs duty rates on certain goods, provided no substitutable goods are produced in Australia. This particular TCO was applied for by Bluescope Steel Ltd and was approved as the CEO determined that no substitutable goods were produced domestically. The instrument specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty from the general rate of 5% to free. The TCO applies across the Commonwealth and its commencement date aligns with the date the application was lodged, 24 March 2010. Importantly, the TCO does not affect the rights of any person as at the date of registration to their disadvantage nor does it impose any liabilities on persons other than the Commonwealth for actions taken prior to the registration date.
Key Provisions
The Tariff Concession Instrument No. 1014473, under the Customs Act 1901, primarily concerns Tariff Concession Orders (TCOs) that may be made by the Chief Executive Officer of Customs (CEO) (sections 269F and 269P(3)). When an application for a TCO is lodged, the CEO must assess whether the application meets the core criteria outlined in section 269C of the Act. This assessment hinges on whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, a written order is made, declaring that the goods in question are subject to a specified item of Schedule 4 of the Customs Tariff Act 1995, thus resulting in a lower rate of customs duty (section 269P(3)).
The obligations imposed by the Act on the parties involved are multifaceted. For the CEO, the primary obligation is to assess applications for TCOs against the core criteria established in the Act (section 269C). This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. Furthermore, the CEO must ensure that the application is not in respect of goods specified in section 269SJ, which cannot be subject to a TCO (section 269F). Additionally, the CEO has a duty to publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In the case of Bluescope Steel Ltd’s application for certain continuous slab caster parts, the CEO found that no substitutable goods were produced in Australia, thus satisfying the core criteria for the TCO (section 269C).
Failing to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. The Act does not explicitly detail offences or penalties for breaches related to the TCO process itself. However, the failure to adhere to the criteria for a TCO could potentially lead to legal challenges or disputes over the validity of the concession granted. Moreover, any subsequent misuse or improper application of the TCO could result in legal actions or penalties under other relevant sections of the Customs Act or associated regulations. It is essential for all parties involved to ensure compliance with the statutory requirements to avoid any potential legal ramifications.
In summary, the Tariff Concession Instrument No. 1014473 under the Customs Act 1901 provides a framework for the CEO to assess and grant TCOs to reduce customs duty on specific goods, provided the core criteria are met. The obligations for the CEO include assessing applications, ensuring they meet the statutory criteria, and publishing notices in the Gazette. While the Act does not explicitly detail penalties for non-compliance with the TCO process, any misuse or improper application of the TCO could lead to legal consequences under the broader scope of the Customs Act or related regulations.