EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100392
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 steam boiler auxiliary plant on 04 January 2011.
Instrument
TCO No 1100392 was made on 21 March 2011. It declares that those certain steam boiler auxiliary plant 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. 1100392 is taken to have come into force on 04 January 2011.
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 application of customs duties, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA of the Act. This mechanism was introduced to address the need for providing tariff concessions for certain goods, which would otherwise face higher customs duties. The objective is to facilitate trade by reducing the duty burden on specific goods, provided that they are not substitutable by domestic production and meet the core criteria set forth in the Act. In the case of Bluescope Steel (AIS) Pty Ltd, the CEO issued TCO No. 1100392 on 21 March 2011, effective from 4 January 2011, declaring that certain steam boiler auxiliary plant would be subject to a concessional rate of duty of free, down from the general rate of 5%. This decision followed a determination that no substitutable goods were produced in Australia at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 1100392 under the Customs Act 1901 applies to the reduction of customs duty on certain steam boiler auxiliary plant as specified in the instrument. The application of this act is directed towards entities and individuals involved in the importation of these specific goods, granting them tariff concessions that align with the provisions of item 50 of Schedule 4 to the Customs Tariff Act 1995. The act effectively alters the duty from a general rate of 5% to a concessional rate of free, contingent on the CEO’s determination that no substitutable goods are produced in Australia. The scope of this act is national, applying across all jurisdictions in Australia as it pertains to the Commonwealth’s customs regulations. The act does not extend to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The CEO’s decision-making process includes public consultation, inviting submissions from interested parties, although in this instance, no submissions were received. The commencement of the tariff concession aligns with the date the application was lodged, providing immediate effect from 04 January 2011, without retrospective liability or disadvantage to parties not involved in the application process.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1100392 under the Customs Act 1901 include sections 269C, 269B, 269E, and 269P(3) (subsections 269K(1) and 269S(1) also play a significant role). Section 269C of the Act sets the core criteria that must be met for a Tariff Concession Order (TCO) to be issued, which primarily involves ensuring that no substitutable goods are produced in Australia on the day the application is lodged (section 269B). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written order (section 269P(3)) is made to declare the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Subsection 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to submit their reasons to the CEO. Lastly, subsection 269S(1) stipulates that the TCO is considered to have come into force on the date the application was lodged.
The obligations imposed by this legislation on the parties involved primarily pertain to the CEO of Customs. The CEO must ensure that any TCO application complies with the core criteria outlined in the Act, which involves verifying that no substitutable goods are being produced in Australia at the time of application. Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties and to make a written order if the application meets the criteria. The applicant, in this case, Bluescope Steel (AIS) Pty Ltd, must provide sufficient evidence to demonstrate that no substitutable goods are being produced in Australia. Importers of the goods who benefit from the TCO may also have the obligation to apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
The Act does not explicitly outline specific offences, penalties, or consequences for breach in this context. However, the failure to comply with the requirements for issuing a TCO or the improper application of the concession could potentially lead to legal challenges or disputes. The legislative framework ensures that the rights of importers are beneficially affected and that no liabilities are imposed on any person, including the Commonwealth, regarding actions taken before the TCO comes into force.