EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1038036
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 applied for a TCO in respect of certain molten metal pumps on 08 September 2010.
Instrument
TCO No 1038036 was made on 29 November 2010. It declares that those certain molten metal pumps 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. 1038036 is taken to have come into force on 08 September 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 Commonwealth Parliament, provides a framework for the imposition of customs duties on imported goods. To address the problem of ensuring that Australia's manufacturing sector remains competitive and to facilitate the import of goods that are not produced domestically, Part XVA of the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). These orders reduce the customs duty on specified imported goods, provided that no substitutable goods are produced in Australia. The policy objective of this legislative instrument is to enhance Australia's trade competitiveness and support the local manufacturing industry by ensuring that the concessional duty rates are applicable only to goods that are not produced in Australia. The Tariff Concession Instrument No. 1038036, made under this Act, exemplifies the process by which the CEO may grant such concessions, in this case to Bluescope Steel for certain molten metal pumps, by declaring them as subject to a zero rate of duty under the Customs Tariff Act 1995.
Scope and Application
The Tariff Concession Instrument No. 1038036 under the Customs Act 1901 applies to specific molten metal pumps, which were subject to an application by Bluescope Steel. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. The CEO is required to ensure that the goods do not have substitutable Australian-made equivalents and meet other criteria specified in the Act, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it applies across Australia under the Commonwealth's legislative power. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage anyone by affecting rights as at the date of the TCO registration. Exclusions are based on goods specified in section 269SJ of the Act, which cannot be subject to a TCO. This legislative instrument extends the application of the Customs Act 1901 by detailing the specific circumstances under which the concession applies.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (sections 269F and 269P(3)). A TCO allows for a reduced rate of customs duty on specified goods. An application for a TCO can be made under section 269F, but the CEO must ensure that the goods are not those listed in section 269SJ, which are ineligible for TCOs. For a TCO to be issued, the CEO must determine if the application meets the core criteria, particularly that no substitutable goods are being produced in Australia (section 269C). The terms 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are defined in sections 269D, 269E, and 269B respectively.
The obligations under this legislation for parties include ensuring that any application for a TCO is valid and meets the specified criteria (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from interested parties regarding the TCO application (subsection 269K(1)). Once a TCO is issued, it does not affect the rights of any person as they stood before the date of registration, nor does it impose any new liabilities (subsection 269S(1)).
Breaches of the requirements set out in the Customs Act 1901 can lead to various consequences. While the Act does not specify detailed penalties, breaches could result in the imposition of the standard duty rate on the goods, or other penalties as prescribed by the Act. Additionally, failure to comply with the conditions of a TCO could lead to legal actions or penalties under the broader customs regulations. The CEO has the authority to enforce the provisions of the Act, ensuring that all obligations are met by the parties involved.