EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021185
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 Pty Ltd applied for a TCO in respect of certain steam pipes on 10 May 2010.
Instrument
TCO No 1021185 was made on 19 July 2010. It declares that those certain 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. 1021185 is taken to have come into force on 10 May 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. 1021185 was enacted in 2010 under the Customs Act 1901 to provide a tariff concession for certain steam pipes, reducing the customs duty from 5% to free. This instrument was created to address the gap in the tariff system where certain imported goods, in this case specific steam pipes, did not have an Australian-produced equivalent and thus qualified for a tariff concession. The instrument was issued by the Chief Executive Officer of Customs, acting under the authority granted by the Customs Act 1901. The policy objective behind this legislation is to support the importation of goods that cannot be produced domestically, thereby promoting economic efficiency and consumer choice. No submissions opposing the tariff concession were received following the publication of the application in the Gazette, indicating broad acceptance of the measure.
Scope and Application
The Tariff Concession Instrument No. 1021185 under the Customs Act 1901 applies to the specific case of Bluescope Steel Pty Ltd, which sought a Tariff Concession Order (TCO) for certain steam pipes. The application and subsequent concession are governed by the provisions of Part XVA of the Customs Act, which establish the framework for TCOs. A TCO is applicable to goods that are not prohibited from receiving such concessions as outlined in section 269SJ of the Act. The core criteria for approval of a TCO, as per section 269C, requires that no substitutable goods were produced in Australia on the day the application was lodged. This decision is made by the Chief Executive Officer of Customs (CEO) and hinges on the definitions of terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" as outlined in sections 269D, 269E, and 269F respectively. Once the CEO is satisfied that the application meets the core criteria, a written order is issued under section 269P(3) of the Act, declaring the goods to which the concession applies. In this instance, the CEO declared that certain steam pipes are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%.
The application of this TCO is limited to the specific goods identified in the Instrument No. 1021185, which came into force on the date of the application, 10 May 2010. The geographical and jurisdictional reach of the TCO is determined by the Commonwealth's legislative powers under the Customs Act. Notably, the TCO does not affect the rights of any person, except to the benefit of importers who may apply for a refund of duty on goods imported since the effective date of the TCO. There are no stated exclusions or exemptions within the scope of this particular TCO, and no liabilities are imposed on any person as a result of this concession.
Key Provisions
The primary sections of this legislation, specifically sections 269C, 269F, 269B, and 269P, outline the process for applying for and granting Tariff Concession Orders (TCOs). According to section 269F, an application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO) by a person. The CEO is then required to assess whether the application meets the core criteria as stipulated in section 269C. This assessment involves determining if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must issue a TCO, which specifies the lower rate of customs duty applicable to the goods in question. This is detailed in section 269P(3), which mandates the creation of a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes several obligations on the parties involved. The CEO must ensure that applications for TCOs are assessed thoroughly to determine if they meet the core criteria, particularly focusing on whether substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must invite any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. The CEO must also consider any submissions received in response to this invitation. In this case, no submissions were received, which potentially expedited the process. Furthermore, the CEO must ensure that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and that no new liabilities are imposed on these persons.
Failure to comply with the provisions of this legislation can result in various consequences. Although the explanatory statement does not explicitly list offences or penalties, breaches of customs regulations generally carry significant penalties. Typically, these can include fines and imprisonment under the Customs Act 1901. For instance, knowingly making a false statement or providing misleading information in an application could result in substantial fines or imprisonment. Additionally, failure to comply with the requirements for refunds of duty, as outlined in the Customs (Admin) Regulations 1996, may also attract penalties. The exact penalties would depend on the nature and severity of the breach but could include significant fines or imprisonment terms as stipulated under the relevant sections of the Customs Act and associated regulations.