EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046704
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 turbine shaft seal assemblies on 18 October 2010.
Instrument
TCO No 1046704 was made on 10 January 2011. It declares that those certain turbine shaft seal assemblies 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. 1046704 is taken to have come into force on 18 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, establishes a framework within which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The 2011 Explanatory Statement details Tariff Concession Instrument No. 1046704, which was introduced to address the specific needs of Bluescope Steel concerning the importation of turbine shaft seal assemblies. The Act aims to facilitate trade by providing tariff concessions where appropriate, ensuring that such concessions do not disadvantage any party and do not impose new liabilities. The TCO in question was made to align with the policy objective of reducing the tariff burden on certain imported goods, thereby promoting efficiency and competitiveness in relevant industries.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the implementation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, enabling a lower rate of customs duty on certain goods. This provision applies to any person or entity that meets the core criteria set out in section 269C, which requires the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO mechanism extends to national jurisdiction, affecting customs duties on goods imported into Australia. Notably, certain goods are excluded from TCO consideration under section 269SJ. The Act allows for the application to be refined or extended via subordinate instruments, although this specific TCO does not indicate any amendments. The TCO No. 1046704, for example, applies to certain turbine shaft seal assemblies, granting them a free rate of duty under item 50 of Schedule 4 to the Tariff, effective from the date of the application, 18 October 2010.
Key Provisions
The key operative sections of the Customs Act 1901, specifically Part XVA, establish the framework for Tariff Concession Orders (TCOs) as referenced in sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding certain goods. If the application is deemed valid, the CEO evaluates whether the application meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO determines that the application satisfies these criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as indicated in subsection 269P(3). This declaration effectively reduces the duty on the specified goods, in this case, to free.
The obligations imposed by the Act on the parties involved are primarily centred around the application and approval processes for TCOs. The applicant must ensure that their application is valid and meets the criteria specified in section 269C of the Act. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was submitted. The CEO, on the other hand, is obligated to review the application, determine its validity, and, if the criteria are met, issue a written TCO. Additionally, the CEO must publish a notice in the Gazette, as per subsection 269K(1), inviting submissions from any interested parties regarding the proposed TCO. In this instance, the CEO did not receive any submissions.
In terms of consequences for breach, the Act does not explicitly outline offences or penalties for failing to comply with the TCO provisions. However, the general legal framework in Australia means that non-compliance could result in legal action. For instance, if an applicant knowingly provides false information in their TCO application, they could potentially face criminal charges for fraud. Similarly, the CEO may face administrative consequences for improperly issuing a TCO. Although the Act does not specify penalties, breaches of customs regulations can lead to significant fines and legal repercussions under the broader Customs Act 1901 and related legislation.