EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1045903
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 continuous slab caster parts on 12 October 2010.
Instrument
TCO No 1045903 was made on 07 January 2011. 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. 1045903 is taken to have come into force on 12 October 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 regulation of customs duties in Australia. Among its provisions, Part XVA allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders can reduce the customs duty on specific goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The problem this legislative framework addresses is the need to provide relief to importers and manufacturers by reducing customs duties on specific goods under certain conditions, thereby promoting trade and economic efficiency. The Explanatory Statement for Tariff Concession Instrument No. 1045903, issued on 7 January 2011, details an application by Bluescope Steel for a TCO concerning certain continuous slab caster parts, which was granted as no substitutable goods were produced in Australia. The instrument effectively reduced the duty on these parts from the general rate of 5% to free, thus benefiting importers by potentially allowing them to claim refunds for duties paid on imports since 12 October 2010, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1045903 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO). In this instance, the Act applies to Bluescope Steel and the particular continuous slab caster parts they have applied for a concession on. The legislation facilitates the reduction or exemption of customs duties on these goods, provided that no substitutable goods are produced in Australia at the time of application. The instrument extends to the Commonwealth jurisdiction and its application is contingent upon the CEO of Customs being satisfied that the core criteria set out in the Customs Act 1901 are met. The TCO does not impose any new liabilities and protects the rights of persons, including the beneficial rights of importers who may apply for duty refunds on imports made since the TCO's effective date. Additionally, subordinate instruments may extend or modify the application of this Act, but no exclusions or exemptions are explicitly stated in this particular TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Order (TCO) No. 1045903, provide a framework for the Chief Executive Officer (CEO) of Customs to grant tariff concessions on certain goods. Specifically, Section 269F allows for an application to be made to the CEO for a TCO on goods, provided they are not specified in Section 269SJ as ineligible. The CEO must assess whether the application meets the core criteria outlined in Section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the criteria are met, the CEO must issue a written order declaring the goods to which the concession applies, as specified in Section 269P(3).
Under the Act, the CEO has specific obligations when handling a TCO application. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions opposing the TCO (subsection 269K(1)). In the case of TCO No. 1045903, no submissions were received. Additionally, the CEO is required to ensure that the TCO does not disadvantage any person or impose liabilities on anyone for actions taken before the TCO's effective date, as stipulated in subsection 269S(1).
The Act does not explicitly outline criminal or civil penalties for breaches related to the TCO process itself. However, any misuse or fraudulent activity in claiming tariff concessions could potentially lead to penalties under other sections of the Customs Act or related legislation, such as fines or imprisonment for offences like fraud or misrepresentation. The Act ensures that the rights of importers are positively affected by allowing them to apply for duty refunds on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person, maintaining the integrity and fairness of the customs duty system.