EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1054348
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 Pty Ltd applied for a TCO in respect of certain slide and/or slide gate dust discharge blast furnace valves on 13 December 2010.
Instrument
TCO No 1054348 was made on 7 March 2011. It declares that those certain slide and/or slide gate dust discharge blast furnace valves 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. 1054348 is taken to have come into force on 13 December 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, provides a framework for the administration of customs and excise duties. Among its provisions, Part XVA of the Act facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specified goods, provided certain criteria are met. Tariff Concession Instrument No. 1054348, made under the authority of the Customs Act 1901, aims to address the need for tariff concessions on specific goods by granting a lower duty rate, thereby encouraging trade and potentially lowering costs for importers. The instrument was introduced to ensure that no substitutable goods were produced domestically, thus justifying the concession. The Tariff Concession Order for certain slide and/or slide gate dust discharge blast furnace valves came into force on the date the application was lodged, 13 December 2010, and has since enabled a duty-free importation of these goods.
Scope and Application
The Customs Act 1901 applies to the regulation of customs duty on imported goods, including the establishment of Tariff Concession Orders (TCOs) that reduce or eliminate customs duty for certain goods. Under this Act, the Chief Executive Officer of Customs can make a TCO if an application is made by a person, such as a company, and if the application meets the core criteria specified in the Act, including the absence of substitutable goods produced in Australia. This Act applies to the Commonwealth and is enacted to facilitate trade and encourage the production of certain goods by reducing customs duty. The Act does not disadvantage existing rights of persons other than the Commonwealth and does not impose new liabilities on them for actions taken prior to the making of a TCO. Any TCOs are subject to the provisions of the Customs Tariff Act 1995, and the TCO can be further defined or amended through subordinate instruments. In this instance, Tariff Concession Instrument No. 1054348 was made under this Act to provide a tariff concession for specific blast furnace valves, effectively granting them a free duty rate, provided that no suitable substitute was produced in Australia at the time of the application.
Key Provisions
The Customs Act 1901 (the Act) includes provisions for the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) under section 269F. These orders allow for a lower rate of customs duty on certain goods, provided the application meets specific criteria. According to section 269C, an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Further, section 269B clarifies terms such as 'goods produced in Australia' and 'ordinary course of business'. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P(3), specifying the applicable tariff item.
The obligations imposed by the Act on the parties or entities it governs include ensuring that any application for a TCO is lodged in a timely manner and that the goods in question do not have substitutable equivalents produced in Australia. The CEO must also take specific actions, such as publishing a notice in the Gazette under section 269K(1) and ensuring there is no public opposition to the proposed concession. Once the application is accepted as valid and the core criteria are met, the CEO is mandated to issue a TCO.
Failure to comply with the provisions of the Act or the terms of a TCO may lead to legal consequences. While the explanatory statement does not detail specific offences, breaches of the Customs Act 1901 or the Customs Tariff Act 1995 could result in civil or criminal penalties. The maximum penalties for contravening the Customs Act 1901 can include substantial fines and, in serious cases, imprisonment. For instance, under section 264 of the Act, a person who knowingly makes a false or misleading statement in an application for a TCO could face penalties of up to five years' imprisonment or a fine of up to 5,250 penalty units, or both. Additionally, failure to adhere to the terms of the TCO could result in the loss of the tariff concession benefits or other specified penalties.