EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100393
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 refractory hot repair mixture on 04 January 2011.
Instrument
TCO No 1100393 was made on 28 March 2011. It declares that those certain refractory hot repair mixture 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. 1100393 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 Commonwealth Parliament, addresses the need for tariff concessions on specific goods that are not produced domestically, thereby promoting fair trade practices. The Act facilitates the application of lower customs duties to goods that are subject to Tariff Concession Orders (TCOs), provided certain criteria are met. In this instance, Tariff Concession Instrument No. 1100393 was introduced on 28 March 2011, following an application by Bluescope Steel (AIS) Pty Ltd for a TCO on certain refractory hot repair mixtures. The policy objective is to ensure that the application of tariff concessions does not disadvantage domestic producers while allowing for the importation of necessary goods at a reduced duty rate. This legislative instrument reflects the Act's aim to support importers by potentially reducing their duty costs, thus fostering competitive trade practices.
Scope and Application
The Tariff Concession Instrument No. 1100393 under the Customs Act 1901 applies to individuals or entities, such as Bluescope Steel (AIS) Pty Ltd, who seek a reduction in the customs duty on specific goods through the application process for a Tariff Concession Order (TCO). The Act is applicable on a Commonwealth level and pertains to goods that are not produced in Australia and for which no substitutable goods are produced domestically. The instrument was triggered by Bluescope Steel (AIS) Pty Ltd's application for a TCO concerning certain refractory hot repair mixtures, which led to a declaration by the Chief Executive Officer of Customs that these goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively setting their duty rate at free, down from the general rate of 5%. The TCO does not disadvantage any person other than the Commonwealth, nor does it impose liabilities on any person regarding actions taken before the date of registration. Instead, it potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date. The scope of the Act can be further extended or restricted through subordinate instruments, which may provide additional criteria or guidelines for TCO applications.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1100393 (TCO No. 1100393) under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, 269P, and 269K. Section 269F allows for applications to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines terms such as ‘goods produced in Australia’ and ‘ordinary course of business’, while section 269P mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be made. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid.
The Act imposes obligations on the CEO to review applications for TCOs and determine whether they meet the core criteria as outlined in section 269C. The CEO must also publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid, as per section 269K. Bluescope Steel (AIS) Pty Ltd, the applicant in this instance, must ensure their application for a TCO is complete and meets the criteria set out in the Act. The CEO's role is to evaluate the application and make a decision based on the provided information.
Any breaches of the conditions or misrepresentations in a TCO application may lead to civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Customs Act 1901 can generally result in fines or imprisonment. The severity of penalties depends on the nature and extent of the breach. The Tariff Concession Instrument itself does not impose new liabilities on any person and does not affect the rights of individuals as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date. Importers, however, will benefit from being able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.