EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1056464
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 Limited applied for a TCO in respect of certain combustion air fan walking beam furnace parts on 30 December 2010.
Instrument
TCO No 1056464 was made on 28 March 2011. It declares that those certain combustion air fan walking beam furnace 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. 1056464 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, enacted by the Commonwealth Parliament, provides a framework for the regulation of customs and border control in Australia. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on certain goods. The explanatory statement for Tariff Concession Instrument No. 1056464, made under this Act, indicates that the instrument was introduced to address the specific need for tariff concessions for certain combustion air fan walking beam furnace parts, which are critical for industrial processes. The policy objective behind this concession is to ensure that Australian industries have access to competitively priced imported goods that are not produced domestically, thereby supporting economic efficiency and competitiveness. The instrument was registered on 28 March 2011, following an application by Bluescope Steel Limited, and came into force on 30 December 2010, with no submissions opposing the concession received during the consultation period.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to particular goods for which an application has been made, and they are designed to provide a lower rate of customs duty than would otherwise apply. The Act applies to any person or entity that wishes to apply for a TCO in relation to goods that are not specified in section 269SJ of the Act as ineligible for such concessions. The application process involves meeting the core criteria outlined in section 269C, which requires that no substitutable goods are being produced in Australia on the day the application is lodged, with terms such as "substitutable goods" and "ordinary course of business" further defined in sections 269D and 269E respectively. This particular legislation affects all industries and transactions involving the importation of the specified goods, once a TCO has been granted. Geographically, the application of the Act is national, extending across the Commonwealth of Australia. While the Act itself does not explicitly state exclusions, the ineligibility of certain goods as specified in section 269SJ acts as an implicit exclusion. Any further specifications or amendments to the application of the Act may be addressed through subordinate instruments, which could expand or restrict the scope of the concessions provided.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1056464 under the Customs Act 1901 (section 269P(3)) declare that certain combustion air fan walking beam furnace parts are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby making the rate of duty for these goods free, whereas the general rate of duty is 5%. The instrument, which was made on 28 March 2011, follows an application submitted by Bluescope Steel Limited on 30 December 2010, and it is effective from the date the application was lodged. This means that the tariff concession applies retroactively from 30 December 2010.
The Act imposes certain obligations and requirements on the parties involved. Firstly, any person can apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) if the goods in question are not specified in section 269SJ of the Act. Section 269C requires that the CEO must ensure no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. In this case, the CEO was satisfied that no such substitutable goods were produced, thereby meeting the core criteria for the TCO. Furthermore, section 269K(1) mandates the CEO to publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be made. In this instance, no submissions were received.
The legislation also outlines potential offences and penalties for breaches. However, the explanatory statement does not specify any particular offences related to the concession itself. Under the general provisions of the Customs Act 1901, breaches of customs regulations can lead to civil and criminal penalties. Civil penalties can include financial penalties, and in severe cases, criminal penalties can include fines and imprisonment. The maximum penalties depend on the nature and severity of the breach, but they can be significant under Australian law.
The Tariff Concession Instrument No. 1056464 benefits importers by allowing them to apply for a refund of duty on the specified goods imported since the TCO was taken to have come into force. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth and does not disadvantage any person or impose liabilities in respect of anything done or omitted before the date of registration. This ensures that the rights of importers are beneficially affected while safeguarding against retroactive liabilities.