EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048782
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 carbon bonded gunning material for furnace repair on 02 November 2011.
Instrument
TCO No 1048782 was made on 24 January 2011. It declares that those certain carbon bonded gunning material for furnace repair 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. 1048782 is taken to have come into force on 02 November 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, facilitates the establishment of Tariff Concession Orders (TCOs) to provide reduced rates of customs duty on specific goods, thereby addressing the need for economic incentives in certain industries. The Act allows the Chief Executive Officer of Customs to make TCOs under Part XVA, provided that no substitutable goods are produced in Australia and the application meets the core criteria set out in section 269C. This legislative framework aims to foster industrial development and competitiveness by making imported goods more affordable.
Bluescope Steel (AIS) Pty Ltd applied for a TCO for certain carbon bonded gunning materials used in furnace repair, which was subsequently approved and declared effective from 2 November 2010. The Tariff Concession Instrument No. 1048782 was issued on 24 January 2011, reducing the general rate of duty from 5% to free for these specified goods. This measure aims to support the industrial sector by lowering the cost of essential materials, thereby enhancing the competitive edge of Australian businesses.
Scope and Application
The Customs Act 1901, under Part XVA, provides a mechanism for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for goods that meet specific criteria, leading to a reduction or elimination of customs duty on these goods. The Act applies to any individual or entity that wishes to apply for such a concession in respect of goods not listed in section 269SJ, which excludes certain types of goods from eligibility for a TCO. The process involves an application to the CEO, followed by a determination based on whether substitutable goods are produced in Australia in the ordinary course of business. The legislation extends its application across the Commonwealth of Australia and does not impose any new liabilities or disadvantage existing rights of parties other than the Commonwealth. The instrument in question, TCO No. 1048782, specifically addresses certain carbon bonded gunning materials for furnace repair, reducing their duty rate from 5% to free, and was effective as of 2 November 2010.
Key Provisions
The Tariff Concession Instrument No. 1048782 under the Customs Act 1901 pertains to the concession of customs duty on certain carbon bonded gunning material for furnace repair. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia as per section 269C, the CEO must issue a TCO, as outlined in section 269P(3). In this case, the CEO issued TCO No. 1048782 on 24 January 2011, applying to the goods specified by Bluescope Steel (AIS) Pty Ltd, and the TCO was taken to have come into force on 02 November 2010 under subsection 269S(1).
The obligations imposed by the Act on the parties involved include the requirement for applicants to ensure their applications meet the core criteria, particularly the absence of substitutable goods produced in Australia as defined by section 269D and section 269E. The CEO must review the application, consider any submissions made in response to the notice published in the Gazette as per subsection 269K(1), and make a decision on whether to issue the TCO. In this instance, no submissions were received by the CEO, simplifying the decision-making process.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly outline specific offences or penalties for breach of the provisions related to TCOs. However, non-compliance with the requirements or fraudulent applications may lead to the denial of the TCO, and the goods would be subject to the general rate of duty. Importers, if found to have incorrectly claimed concessions, could face civil or criminal liabilities, including fines and potential imprisonment as per the general provisions of the Act for customs-related offences. The specific penalties would depend on the nature and extent of the breach, as detailed in the broader customs legislation.