EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1106114
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 refractory bricks and shapes on 15 February 2011.
Instrument
TCO No 1106114 was made on 02 May 2011. It declares that those certain refractory bricks and shapes 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. 1106114 is taken to have come into force on 15 February 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, facilitates a scheme through which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). These orders are designed to apply lower rates of customs duty to specific goods, thereby encouraging trade and reducing costs for businesses that import these goods. Enacted to address the need for streamlined customs processes and to reduce the financial burden on businesses importing specific goods, the Act allows for the application of tariff concessions to goods that are not produced in Australia and do not have substitutable alternatives domestically. The policy objective is to promote economic efficiency and competitiveness by facilitating easier access to essential goods, thereby benefiting importers who can now benefit from reduced duty rates on certain goods. This mechanism ensures that the rights of importers are protected and can seek duty refunds for goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 1106114 under the Customs Act 1901 applies to the goods specified in the Instrument, which, in this case, are certain refractory bricks and shapes. The application of the Instrument is limited to entities that have applied for and received a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO) based on the criteria outlined in the Act. Specifically, the Act applies to the goods for which the application was made by Bluescope Steel Pty Ltd on 15 February 2011. The Instrument imposes a free rate of customs duty on these goods, provided that the CEO was satisfied that no substitutable goods were produced in Australia. The geographic reach of this Instrument is national, impacting all importers of the specified goods across Australia. The Instrument does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person. The application of the Instrument may be extended or restricted through subordinate instruments, although none are mentioned in the explanatory statement.
Key Provisions
The key provisions of this legislation revolve around the making of a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901 (sections 269C, 269F, 269P(3)). Section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods, provided these goods are not specified in section 269SJ. The CEO must determine if the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application satisfies these criteria, the CEO must issue a written TCO (section 269P(3)), specifying the applicable item from Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved, particularly the CEO, include the responsibility to review and decide on TCO applications (section 269F), to determine whether the core criteria are met (section 269C), and to issue a written TCO if the application is approved (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who might object to the TCO being made (subsection 269K(1)). The CEO's obligations are further detailed by the requirement to ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the TCO's effective date (subsection 269S(1)).
In terms of penalties and consequences for breaches, the legislation does not explicitly outline specific offences or penalties within the text provided. However, non-compliance with the Act's requirements could potentially lead to legal challenges or administrative actions by aggrieved parties. Additionally, under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force. This implies that if a TCO is improperly issued or fails to provide the intended tariff concessions, importers could seek remedies through refund applications, although the specific penalties for such breaches are not detailed in the provided text.