EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1024229
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 Limited applied for a TCO in respect of certain continuous slab caster parts on 31 May 2010.
Instrument
TCO No 1024229 was made on 23 August 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. 1024229 is taken to have come into force on 31 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. 1024229, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods. The instrument was created in response to an application by Bluescope Steel Limited for a Tariff Concession Order (TCO) concerning certain continuous slab caster parts, to which a lower rate of customs duty was applied. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make TCOs, and the policy objective is to ensure that such concessions are granted only if no substitutable goods are produced in Australia. The instrument was published in the Gazette, inviting submissions, though none were received. The TCO came into effect on the date the application was lodged, and it does not disadvantage any existing rights of importers or impose new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (CEO). These TCOs apply to goods specified in the order and provide for a lower rate of customs duty compared to the standard tariff. An application for a TCO can be submitted by any person, provided the goods in question do not fall under the list of ineligible items specified in section 269SJ of the Act. The CEO is required to assess the application against the core criteria outlined in section 269C, which necessitates that no substitutable goods are produced in Australia at the time of application. The CEO must also consider the definitions provided in sections 269D and 269E of the Act, which define terms such as "goods produced in Australia" and "ordinary course of business." If the application meets these criteria, the CEO must issue a written TCO specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. This legislation applies across Australia, as it is a Commonwealth Act, and no submissions were received in opposition to the published notice in the Gazette, indicating a lack of objections to the concession. The TCO in question, No. 1024229, pertains to certain continuous slab caster parts and was applied for by Bluescope Steel Limited on 31 May 2010. The TCO came into force on the same day, with a duty rate of free, effectively benefiting importers who can apply for duty refunds on imports since the effective date.
Key Provisions
The Tariff Concession Instrument No. 1024229, under section 269P(3) of the Customs Act 1901, involves the creation of a Tariff Concession Order (TCO) for certain continuous slab caster parts, which are now subject to a duty rate of free instead of the general rate of 5%. This concession is applicable from the date of the application, 31 May 2010, as per the Act's stipulations in subsection 269S(1). The Chief Executive Officer of Customs (CEO) issued this order following an application by Bluescope Steel Limited, after being satisfied that no substitutable goods were produced in Australia, as required by section 269C of the Act. The CEO’s decision was made in accordance with section 269F, which allows for applications to be made for TCOs in respect of goods, provided they do not fall under the exceptions specified in section 269SJ.
The obligations imposed by this Act, as outlined in section 269K(1), include the CEO's requirement to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions, facilitating the smooth progression of the TCO. Moreover, section 269D through 269E of the Act provides definitions that are critical in determining the eligibility of goods for a TCO, ensuring the application process is transparent and meets all statutory requirements.
In terms of compliance and enforcement, breaches of the provisions outlined in the Customs Act 1901 can lead to significant consequences. Although the specific offences, penalties, or civil/criminal consequences are not detailed in the Explanatory Statement, the Act generally allows for penalties to be imposed for non-compliance. These penalties can include fines and other sanctions as prescribed by the relevant sections of the Act. The Act's framework ensures that any misuse or fraudulent activities related to the TCOs are subject to strict scrutiny and appropriate legal repercussions, thereby maintaining the integrity of the tariff concession scheme.