EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100573
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 line pipe on 05 January 2011.
Instrument
TCO No 1100573 was made on 04 April 2011. It declares that those certain line pipe 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. 1100573 is taken to have come into force on 05 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 Tariff Concession Instrument No. 1100573 was enacted in 2011 under the Customs Act 1901 to address the need for tariff concessions on certain imported goods. The instrument was introduced to provide relief by granting tariff concessions that result in a lower rate of customs duty on specified goods, in this case certain line pipes, where it was determined that no substitutable goods were produced in Australia. This legislative action was overseen by the Chief Executive Officer of Customs, who has the authority to make such orders under section 269F of the Act, provided the application meets the core criteria outlined in sections 269C and 269P(3) of the Act. The primary policy objective is to facilitate trade by reducing the cost of importing specific goods, thereby potentially benefiting importers and the broader market.
Scope and Application
The Customs Act 1901, as amended through Tariff Concession Instrument No. 1100573, applies to entities and persons involved in the importation of goods that are eligible for tariff concessions. Specifically, the Act concerns line pipe products and provides a framework for the application and approval of Tariff Concession Orders (TCO) that grant tariff benefits to certain imported goods. The scope of the Act is geographically broad, covering the entire Commonwealth of Australia, and it applies to any entity or individual importing the specified goods into Australia. The Act ensures that no substitutable goods were produced in Australia on the date the TCO application was lodged, thus qualifying the imported goods for the concession.
The Act’s application is restricted to ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the date the TCO application was submitted. This exclusion criterion is crucial for the determination of eligibility for tariff concessions. The Act also provides that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. Notably, the Act does not disadvantage any person by imposing liabilities in respect of actions taken before the TCO was registered. Subordinate instruments may further extend or restrict the application of this legislation.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 1100573, revolve around the procedures and criteria for the application and issuance of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO determines that the application does not pertain to goods that cannot be subject to a TCO, as outlined in section 269SJ, the application proceeds to be evaluated against the core criteria in section 269C. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged, which is defined under sections 269D, 269E, and 269F.
The obligations imposed by the Act on the parties involved are clear and structured. The CEO of Customs is mandated to make a decision on a TCO application within the stipulated timeframes and must publish a notice in the Gazette, inviting submissions from any interested parties. This is outlined in section 269K. If no submissions are received, the CEO is required to proceed with the decision-making process. Once a TCO is issued, the goods in question are subject to the new tariff rates specified in the order.
Additionally, the legislation specifies the consequences for non-compliance or breaches. While the explanatory statement does not detail specific offences or penalties for failing to adhere to the requirements of the TCO or the Customs Act, it is understood that breaches of customs regulations can lead to various civil and criminal consequences, including fines and potential imprisonment, depending on the severity of the breach. The penalties for such breaches are generally found in the Customs Act 1901 and related regulations, which can include substantial monetary fines and imprisonment terms for serious infractions.
In summary, this piece of legislation provides a structured framework for applying for and issuing TCOs, ensuring that the process is transparent and includes opportunities for public input. The obligations are clear, focusing on the CEO's role in evaluating applications and the rights of importers to seek duty refunds. The potential consequences for non-compliance are severe, reinforcing the importance of adherence to the customs regulations outlined in the Act.