EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101582
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 Pty Ltd applied for a TCO in respect of certain molten metal pump parts on 12 January 2011.
Instrument
TCO No 1101582 was made on 11 April 2011. It declares that those certain molten metal pump 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. 1101582 is taken to have come into force on 12 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. 1101582, enacted under the Customs Act 1901, was introduced to provide tariff concessions for specific goods by reducing or eliminating customs duty on them. This instrument was developed to address the need for tariff adjustments in response to industry applications, ensuring that certain goods benefit from reduced duty rates if they are not produced domestically. The instrument was created by the Chief Executive Officer of Customs, following an application by Bluescope Steel Pty Ltd for tariff concessions on certain molten metal pump parts. The primary objective, as stated in the explanatory statement, is to facilitate the import of goods by reducing their customs duty rates, thereby promoting trade and economic efficiency without disadvantaging existing rights or imposing new liabilities on importers. This instrument came into effect on the date the application was lodged, ensuring that any duty paid prior to the concession's application is eligible for a refund.
Scope and Application
The Tariff Concession Instrument No. 1101582, under the Customs Act 1901, applies to the entity that has applied for tariff concessions, in this instance, Bluescope Steel Pty Ltd. It pertains specifically to the goods that are the subject of the application, namely certain molten metal pump parts. The application of this instrument is national in scope, falling under the Commonwealth’s jurisdiction. The application process involves a determination by the Chief Executive Officer of Customs as to whether the goods for which concessions are sought are not substitutable by goods produced in Australia in the ordinary course of business, as per the criteria outlined in the Customs Act 1901. The geographic reach of this Act is national, and it does not specify any exclusions or exemptions beyond those outlined in section 269SJ of the Act. The instrument extends the application of the Act by providing specific details regarding the goods that qualify for the tariff concession and the effective date of the concession, which is the date the application was lodged.
Key Provisions
The primary sections of this legislation (F2011L01627) involve the establishment and execution of a Tariff Concession Order (TCO) under the Customs Act 1901 (sections 269C, 269F, and 269P(3)). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO concerning specified goods, while section 269C stipulates that an application meets the core criteria if no substitutable goods are produced in Australia at the time the application is made. If the CEO is satisfied that the application meets these criteria, section 269P(3) mandates that the CEO must issue a written TCO order, as demonstrated in TCO No. 1101582, which applies to certain molten metal pump parts.
The obligations imposed by this legislation on the CEO include accepting valid TCO applications and determining whether they meet the core criteria, which involve verifying that no substitutable goods are produced in Australia (section 269C). Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons for opposing the TCO. If no submissions are received, the CEO must proceed to issue the TCO as mandated.
The legislation also sets out consequences for breaches. While specific offences, penalties, or civil and criminal consequences are not detailed in this particular legislation, it is implied that non-compliance with the Customs Act 1901, including the provisions for TCOs, could result in legal repercussions. Typically, breaches of the Customs Act can lead to fines and other penalties as prescribed by the relevant sections of the Act and the Customs Regulations 1993. For instance, failure to comply with TCO requirements could potentially lead to disputes over duty refunds or other financial penalties, as importers may seek redress through the courts if they believe they have been unfairly disadvantaged.