EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1030521
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 blast furnace seals on 06 July 2010.
Instrument
TCO No 1030521 was made on 29 September 2010. It declares that those certain blast furnace seals 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. 1030521 is taken to have come into force on 06 July 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 Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). This Act addresses the need to provide tariff concessions on certain goods, ensuring they benefit from a lower rate of customs duty, subject to specific criteria. A TCO can be applied for by any person, provided the goods in question do not fall under the list specified in section 269SJ, which excludes certain goods from TCO eligibility. The core criteria for approving a TCO application, as outlined in sections 269C and 269F, include the absence of substitutable goods produced in Australia at the time of application. This mechanism ensures that Australian industries are not unfairly disadvantaged by the import of similar goods. The Tariff Concession Instrument No. 1030521, enacted on 29 September 2010, exemplifies the application of this scheme by granting tariff concessions on specific blast furnace seals, lowering the duty rate from 5% to free. This instrument was introduced without any objections following a public notice period, reflecting the streamlined process designed to efficiently address tariff concession applications.
Scope and Application
The Tariff Concession Instrument No. 1030521 under the Customs Act 1901 applies specifically to certain blast furnace seals, which are goods that Bluescope Steel Pty Ltd sought to have a tariff concession for. The Act governs the process by which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCO) to lower the rate of customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The TCO No. 1030521 was made on 29 September 2010, declaring that the specified blast furnace seals are subject to a duty rate of free, down from the general rate of 5%. The application of this instrument is limited to the goods specified in the TCO and does not disadvantage any person other than the Commonwealth, while providing a benefit to importers who can now apply for a refund of duty on the specified goods imported since the TCO's effective date of 6 July 2010.
Key Provisions
The main operative sections of this legislation include section 269F, which allows for the application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), and section 269C, which outlines the core criteria for a TCO application to be met. If these criteria are met, section 269P(3) requires the CEO to issue a written TCO that specifies the goods to which a particular tariff applies. This instrument, TCO No. 1030521, exemplifies these provisions by declaring that certain blast furnace seals are subject to a zero rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, applicants for a TCO, such as Bluescope Steel Pty Ltd in this instance, must ensure that their applications are made in accordance with section 269F and that they meet the core criteria specified in section 269C. The CEO, on receiving a valid application, has the duty under section 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties. The CEO must then consider any submissions received and decide whether to issue a TCO as per section 269P(3). In this case, the CEO did not receive any submissions opposing the TCO, leading to its issuance.
Failure to comply with the provisions of the Customs Act 1901 may result in legal consequences. While the explanatory statement does not specify detailed offences or penalties for breaches, it is understood that non-compliance with customs regulations can lead to fines, penalties, and potential legal action under the relevant sections of the Act. The severity of these penalties can vary based on the nature and extent of the breach. For instance, wilful or negligent misrepresentation of facts in an application could lead to civil or criminal penalties as prescribed by other sections of the Act.