EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1056460
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.
Bluesscope Steel (AIS) Pty Ltd applied for a TCO in respect of certain sinter cooler pallet car parts on 30 December 2010.
Instrument
TCO No 1056460 was made on 28 March 2011. It declares that those certain sinter cooler pallet car parts 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. 1056460 is taken to have come into force on 30 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 was enacted to regulate the customs and excise duties, and the control of goods entering and leaving Australia. The Act was introduced to address the need for streamlined and efficient customs processes, as well as to provide a legislative framework for the administration of customs duties and tariffs. The relevant legislature in this instance is the Australian Parliament. Policy objectives include facilitating trade by reducing unnecessary barriers and ensuring the efficient collection of revenue through customs duties. Tariff Concession Orders (TCOs) are a mechanism within the Customs Act 1901 that allow for reduced customs duty rates on specific goods under certain conditions, thereby supporting economic activities by making imported goods more affordable. TCO No. 1056460, made on 28 March 2011, is an example of this mechanism in action, providing a tariff concession for certain sinter cooler pallet car parts by Bluesscope Steel (AIS) Pty Ltd.
Scope and Application
The Tariff Concession Instrument No. 1056460, made under section 269F of the Customs Act 1901, applies specifically to certain sinter cooler pallet car parts for which Bluesscope Steel (AIS) Pty Ltd applied for a Tariff Concession Order (TCO). This legislation enables the Chief Executive Officer of Customs to reduce the customs duty on specified goods if certain conditions are met, including the absence of substitutable goods produced in Australia. The primary beneficiaries of this TCO are importers who will have their duty obligations reduced, potentially leading to a refund for any duties paid on such goods since the date the TCO was deemed to come into force. Geographically, the Act applies on a national level within Australia, as it is an instrument under the Commonwealth's Customs Act. The application of the TCO is subject to exclusions outlined in section 269SJ, which specifies goods that cannot be subject to a TCO. Additionally, the scope of the Act may be extended or modified through subordinate instruments, although in this instance, no such amendments are specified.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1056460 are sections 269C, 269P, and 269S of the Customs Act 1901, which provide the framework for making Tariff Concession Orders (TCOs). Specifically, section 269C outlines the core criteria for a TCO application, which must be met by the Chief Executive Officer of Customs (CEO) before a concession can be granted. Section 269P details the process for making a TCO, requiring the CEO to issue a written order if the application meets the criteria. Section 269S governs the commencement of the TCO, specifying that it comes into force on the day the application is lodged.
The Customs Act 1901 imposes several obligations and requirements on parties subject to a TCO. Firstly, any person who wishes to apply for a TCO must ensure their application meets the core criteria outlined in section 269C, particularly that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The CEO must then decide whether to grant the TCO based on this assessment. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections or comments on the application. If no objections are received, the TCO will proceed as granted.
In the case of any breach of the provisions outlined in the Customs Act 1901 or the associated regulations, there are potential civil and criminal consequences. While the explanatory statement does not detail specific penalties, under Australian law, breaches of customs regulations can result in fines and other penalties. For example, knowingly making false statements in a TCO application could lead to criminal charges, with potential penalties including imprisonment and fines. Furthermore, failure to comply with customs duties and tariffs can also result in financial penalties and the confiscation of goods.
The Tariff Concession Instrument No. 1056460 specifically relates to the concession on sinter cooler pallet car parts. By declaring these goods to be subject to a TCO, the instrument ensures that they are exempt from the general rate of duty, which is 5%, and instead are subject to a rate of duty that is free. This concession benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. Importantly, the TCO does not impose any liabilities on any person and does not affect the rights of individuals or entities as at the date of registration, except to provide them with the benefit of the tariff concession.