EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108013
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 Limited applied for a TCO in respect of certain steel injection station discharge chutes on 02 March 2011.
Instrument
TCO No 1108013 was made on 23 May 2011. It declares that those certain steel injection station discharge chutes 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. 1108013 is taken to have come into force on 02 March 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 was amended to introduce Tariff Concession Orders (TCOs) as a mechanism to provide relief on customs duty for certain goods under specific conditions. Enacted by the Parliament of Australia, the purpose of the TCOs is to address economic circumstances by reducing the tariff burden on imported goods, thereby potentially lowering costs for businesses and consumers. This mechanism is particularly intended to benefit industries where domestic production of substitutable goods is either non-existent or insufficient to meet market needs, ensuring that essential goods are accessible without undue financial barriers. The 2011 Tariff Concession Instrument No. 1108013 exemplifies this, as it was designed to alleviate the customs duty burden on certain steel injection station discharge chutes, effectively making them duty-free and thereby supporting the importing industry.
Scope and Application
The Tariff Concession Instrument No. 1108013 under the Customs Act 1901 applies to Bluescope Steel Limited’s application for tariff concessions on certain steel injection station discharge chutes, effective from 2 March 2011. This instrument pertains to goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods exist domestically, thereby qualifying for a lower customs duty rate. The geographic reach of this legislation is national, as it operates under the Customs Act 1901, which is a Commonwealth Act. The application of this instrument is restricted by section 269SJ of the Act, which specifies goods that cannot be subject to a tariff concession order. The Instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person; however, it does benefit importers who can apply for a refund of duty on the specified goods since the date of the Instrument's commencement.
Key Provisions
The Customs Act 1901, under which Tariff Concession Orders (TCOs) are made, outlines the process by which lower rates of customs duty can be applied to specific goods. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for such concessions, provided that the goods are not specified in section 269SJ, which lists items ineligible for TCOs. Once an application is deemed valid, the CEO must consider whether the core criteria in section 269C are met, namely that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. Definitions for terms such as "substitutable goods" and "ordinary course of business" are provided in sections 269D and 269E, respectively.
The obligations imposed by the Act on the CEO are primarily to assess applications against the core criteria, consult with relevant stakeholders, and make decisions transparent. The CEO must publish notices in the Gazette (subsection 269K(1)) inviting objections to the application, although in this case, no objections were received. If the CEO decides that the application meets the criteria, they are required to issue a written TCO under section 269P(3). The TCO must specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995, as was done in TCO No 1108013 for steel injection station discharge chutes.
In terms of breaches and penalties, the Act does not explicitly detail offences or penalties related to the failure to comply with TCOs or the incorrect application of concessions. However, any breach of the Customs Act provisions or regulations may lead to civil or criminal consequences. The general penalties for contravening the Customs Act can include fines and imprisonment, with the exact penalties depending on the severity of the breach. Importers, however, benefit from the ability to apply for duty refunds under paragraph 126(1)(r) of the Regulations, which does not impose additional liabilities on them.
TCO No 1108013, which grants free duty on certain steel injection station discharge chutes, came into effect on 2 March 2011, the date the application was lodged as per subsection 269S(1). This TCO ensures that no person other than the Commonwealth is disadvantaged or imposed with liabilities for actions prior to the TCO's registration. The rights of importers are positively affected, as they can apply for duty refunds from the effective date of the TCO. This legislation therefore provides a structured framework for tariff concessions, ensuring that the process is transparent, fair, and benefits eligible importers without imposing new liabilities.