EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028800
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 steel converter vessel parts on 28 June 2010.
Instrument
TCO No 1028800 was made on 21 September 2010. It declares that those certain steel converter vessel 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. 1028800 is taken to have come into force on 28 June 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 was enacted to facilitate the regulation of customs duties and tariffs, ensuring that they are applied fairly and efficiently. A key feature of this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA, which can reduce customs duty rates on certain goods. This process was introduced to address the need for flexibility in tariff applications to support Australian industries and importers, ensuring that they do not face undue disadvantages due to the lack of local production of substitutable goods. The objective is to promote fair trade practices and support economic activities by allowing concessions when appropriate. The instrument, Tariff Concession Instrument No. 1028800, was made on 21 September 2010, following an application by Bluescope Steel Pty Ltd for certain steel converter vessel parts, reflecting the Act's intent to provide timely tariff relief where justified.
Scope and Application
The Tariff Concession Instrument No. 1028800, issued under the Customs Act 1901, applies to Bluescope Steel Pty Ltd and specifically concerns the tariff concession for certain steel converter vessel parts. This instrument is applicable on a Commonwealth level and is a direct outcome of an application under section 269F of the Act. The application was processed by the Chief Executive Officer of Customs, who determined that the application met the core criteria as per section 269C, given that no substitutable goods were being produced in Australia on the date of the application. The concession was granted in the form of a Tariff Concession Order (TCO), making the general duty of 5% on these goods free, as declared under item 50 of Schedule 4 to the Customs Tariff Act 1995. The application and subsequent TCO do not disadvantage any person other than the Commonwealth and do not impose any liabilities on any person. The TCO came into effect on the date the application was lodged, 28 June 2010.
Key Provisions
The Customs Act 1901, particularly under Part XVA, provides a mechanism for the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. Section 269F allows a person to apply to the CEO for a TCO, provided the goods are not specified in section 269SJ, which lists goods ineligible for such concessions. For an application to be considered, it must meet the core criteria outlined in section 269C, which requires that on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms like 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are provided in sections 269B, 269D, and 269E respectively.
Once the CEO is satisfied that an application meets these criteria, they must issue a written order under section 269P(3), which declares that the goods specified in the application are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. This process was followed in the case of Bluescope Steel Pty Ltd's application for a TCO on certain steel converter vessel parts, leading to TCO No 1028800. This order, effective from 28 June 2010, resulted in a reduction of the duty rate from the general 5% to free for these specific goods.
The obligations under this Act include the requirement for the CEO to publish a notice in the Gazette (subsection 269K(1)) inviting submissions if any party believes the TCO should not be made. In this case, no submissions were received. The TCO itself, as per subsection 269S(1), is effective from the date the application was lodged, meaning TCO No 1028800 was effective from 28 June 2010. Importantly, the TCO does not retroactively affect any rights or impose liabilities on any party other than the Commonwealth, and importers of the affected goods can apply for duty refunds under paragraph 126(1)(r) of the Regulations for imports made since the effective date.
Under the Customs Act 1901, any failure to comply with the provisions regarding TCOs could lead to significant consequences. While the specific penalties for breaches are not detailed in the provided text, it is generally understood that non-compliance with customs regulations can result in both civil and criminal penalties. Civil penalties may include fines, and in severe cases, criminal penalties such as imprisonment may apply. The exact penalties would depend on the nature and severity of the breach, as well as any additional provisions under related legislation or regulations. The Act ensures that any enforcement actions are proportionate to the breach and aim to maintain the integrity of the customs duty system.