EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046941
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 boiler burners on 19 October 2010.
Instrument
TCO No 1046941 was made on 10 January 2011. It declares that those certain boiler burners 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. 1046941 is taken to have come into force on 19 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, was amended in 1902 to introduce a scheme under which Tariff Concession Orders (TCOs) could be made. The Act was further updated to allow the Chief Executive Officer of Customs to reduce or exempt customs duty on certain imported goods under specific conditions, thereby addressing the need for tariff concessions to support industry and economic competitiveness. The 2011 Explanatory Statement pertains to Tariff Concession Instrument No. 1046941, which was introduced to provide a tariff concession for certain boiler burners, reducing the duty rate from 5% to free. This was achieved by confirming that no substitutable goods were produced in Australia at the time of the application. The policy objective was to ensure that the tariff concession does not disadvantage existing stakeholders or impose new liabilities on them.
Scope and Application
The Tariff Concession Instrument No. 1046941 under the Customs Act 1901 applies to the concession of customs duty rates for certain boiler burners imported into Australia. This instrument is specifically applicable to Bluescope Steel, who submitted an application for a Tariff Concession Order (TCO) on 19 October 2010. The scope of this legislation is limited to the goods specified in the application, namely certain boiler burners, and it is operational within the parameters of the Customs Act 1901. The application of the TCO is contingent upon the determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia at the time the application was lodged, as per sections 269C and 269D of the Act. The geographic reach of this legislation is confined to Australia, as it pertains to the importation of goods into the country and the associated customs duties. The TCO does not disadvantage any persons other than the Commonwealth and does not impose any liabilities on any person other than the Commonwealth. The TCO No. 1046941 was registered on 10 January 2011, and it is effective from the date the application was lodged, 19 October 2010. The Act allows for the potential extension or restriction of the application through subordinate instruments, although no such instruments are mentioned in this particular case.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, 269F, and 269P (sections 269C, 269B, 269D, 269E, 269F, and 269P respectively). Section 269F permits a person to apply to the Chief Executive Officer of Customs (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 and that it meets the core criteria as outlined in section 269C, then the CEO must make a TCO. The core criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively.
The obligations imposed on the parties by the Act include the requirement for the CEO to make a TCO if the application meets the core criteria (section 269P(3)). Additionally, subsection 269K(1) mandates that as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. In this instance, the CEO did not receive any submissions in response to the published notice.
The Act does not explicitly state any offences, penalties, or civil/criminal consequences for breach of the TCO provisions. However, the provisions of the Customs Act 1901 and associated regulations would apply if there were any breaches related to the importation of goods or the administration of customs duties. The general rate of duty on the goods subject to the TCO is 5%, and the rate for the goods subject to the TCO is free, as declared in TCO No 1046941. The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person. 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, as per paragraph 126(1)(r) of the Regulations.