EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042670
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 steel slab straddle carriers on 16 September 2010.
Instrument
TCO No 1042670 was made on 06 December 2010. It declares that those certain steel slab straddle carriers 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. 1042670 is taken to have come into force on 16 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 Parliament of Australia, provides a framework for the regulation of customs and excise, including the establishment of a scheme for Tariff Concession Orders (TCOs). The primary purpose of this legislation, specifically the Explanatory Statement for Tariff Concession Instrument No. 1042670, is to address the issue of providing tariff concessions for certain imported goods under specific circumstances. The policy objective is to ensure that the application of tariff concessions does not disadvantage Australian producers by allowing reduced customs duty rates for goods where no substitutable goods are produced domestically. This is achieved by allowing the Chief Executive Officer of Customs to grant concessions if it is determined that no substitutable goods are produced in Australia in the ordinary course of business. The Explanatory Statement details the process followed for the concession application submitted by Bluescope Steel, which was approved and declared effective from the date of application, thereby allowing for a zero rate of duty on the specified steel slab straddle carriers.
Scope and Application
The Tariff Concession Instrument No. 1042670 applies to specific goods, in this case certain steel slab straddle carriers, and is enacted under Part XVA of the Customs Act 1901. This legislation allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods if certain criteria are met, namely that no substitutable goods are produced in Australia. This instrument is effective from the date the application for the concession was lodged, in this case, 16 September 2010, and it applies on a national level within Australia. The application process involves a review by the CEO to ensure that the goods do not fall within the categories ineligible for TCOs as outlined in section 269SJ of the Act. Once the core criteria are met, the CEO issues a TCO, as evidenced by TCO No. 1042670, which declares the specified steel slab straddle carriers to be subject to a zero rate of customs duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument does not disadvantage any person by affecting rights as at the date of registration or imposing liabilities for actions prior to the registration date, but rather benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, specifically under Part XVA, sets up a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be made by any person for goods that are not explicitly excluded by section 269SJ of the Act. If the application is not for goods that are ineligible for a TCO, the CEO then evaluates whether the application meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the date the application was made, no substitutable goods were being produced in Australia in the ordinary course of business (s 269C, s 269D, s 269E). If the CEO determines that the application meets these criteria, a written TCO is issued, specifying that the goods in question are subject to a particular rate of duty as set out in Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
The obligations under this legislation primarily fall on the CEO, who is responsible for assessing TCO applications and deciding whether they meet the core criteria. Once an application is deemed valid and eligible, the CEO must issue a written TCO, ensuring that all procedural requirements, including any necessary publication in the Gazette, are met (s 269K(1)). For applicants, the primary obligation is to ensure that the application is complete and accurate, providing all necessary information for the CEO to make an informed decision. The CEO also has an obligation to consider any submissions received in response to the published notice in the Gazette, although in the case of TCO No. 1042670, no submissions were received.
In terms of penalties and consequences for breaches, the Customs Act 1901 does not specify particular offences or penalties related to the TCO process itself. However, any misuse of the TCO system, such as fraudulent applications or incorrect claims for duty refunds, could potentially lead to legal consequences under other provisions of the Customs Act or related legislation. For instance, making false statements or representations to the CEO could be considered an offence under section 245 of the Customs Act, which carries a maximum penalty of 10 years imprisonment, or under other relevant provisions that may incur fines or imprisonment. The Act also provides for civil penalties, including financial penalties for non-compliance or misuse of the TCO system.