EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048554
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 (AIS) Pty Ltd applied for a TCO in respect of certain ignition probes which are parts for a flare stack ignition on 29 October 2010.
Instrument
TCO No 1048554 was made on 24 January 2011. It declares that those certain ignition probes which are parts for a flare stack ignition 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. 1048554 is taken to have come into force on 29 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 was enacted by the Parliament of Australia to provide for the regulation of customs and excise, including the imposition of duties and taxes on imported goods. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act addresses the problem of ensuring that essential goods, particularly those not produced domestically, can be imported at a lower or no duty rate, thereby supporting industry and consumer needs while also encouraging domestic production where feasible. Instrument TCO No. 1048554, made on 24 January 2011, exemplifies this process by applying a zero duty rate to certain ignition probes for flare stack ignitions, as no substitutable goods were produced in Australia. This was in response to an application by Bluescope Steel (AIS) Pty Ltd, and no submissions opposing the concession were received following the required Gazette notice. The objective of the TCO is to provide tariff relief to importers of these specific goods, effective from the date of the application, 29 October 2010.
Scope and Application
The Tariff Concession Instrument No. 1048554 under the Customs Act 1901 applies to a specific category of goods, namely certain ignition probes used in flare stack ignitions, which have been granted a tariff concession order (TCO) by the Chief Executive Officer of Customs. This legislation is directed towards entities and individuals involved in the importation of these goods, thereby providing them with a reduced rate of customs duty from the general rate of 5% to zero. The scope of this Act is limited to the particular goods specified in the TCO, ensuring that no other goods are inadvertently affected by its provisions. The Act operates on a national level, governed by the Commonwealth, and its application is precise and narrowly tailored to the goods defined within the TCO. There are no exclusions or exemptions specified within the Act itself, though it does stipulate that it does not affect the rights of any person in a manner that would disadvantage them or impose liabilities for actions taken before the TCO's effective date. Any broader application or exceptions would be determined through subordinate instruments, which can extend or restrict the application as necessary.
Key Provisions
The main operative sections of this legislation include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows for the application of a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (CEO). The CEO must consider whether the application meets the core criteria under section 269C, which involves assessing if no substitutable goods were produced in Australia on the day the application was lodged. Definitions of key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269B, 269D, and 269E. If the CEO determines that the application meets these criteria, they are required under section 269P(3) to issue a written TCO. The instrument specifies the goods to which the concession applies, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act imposes several obligations on the parties involved. The CEO must promptly consider the validity of any TCO application under section 269F and ensure it does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. Once an application is accepted, the CEO is required to publish a notice in the Gazette under section 269K(1), inviting any interested parties to submit reasons why the TCO should not be granted. Furthermore, the Act mandates that the CEO must not impose any liabilities on a person (other than the Commonwealth) in respect of actions taken before the TCO is registered, as stated in section 269S(1).
In terms of penalties and consequences, the Customs Act does not explicitly state any specific offences or penalties for breaches of the TCO provisions. However, the general principles of administrative law and the overarching framework of the Customs Act may apply. This means that any failure to comply with the obligations or duties outlined in the Act could potentially lead to legal actions for breach of statutory duty, with the remedies and penalties being determined by the courts. It is important to note that while the TCO does not impose liabilities, any misuse or non-compliance with the provisions could result in the nullification of the TCO or other administrative sanctions.