EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108504
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.
Onesteel Limited applied for a TCO in respect of certain blast furnace refractory bricks and/or shapes on 8 March 2011.
Instrument
TCO No 1108504 was made on 30 May 2011. It declares that those certain blast furnace refractory bricks and/or 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. 1108504 is taken to have come into force on 8 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, amended by the Tariff Concession Instrument No. 1108504 in 2011, addresses the gap in tariff concessions for specific imported goods by allowing the Chief Executive Officer of Customs to grant lower customs duties on such goods. This instrument was introduced to provide economic benefits to certain industries by reducing the tariff burden on particular imported items. The Australian Parliament enacted this measure to facilitate smoother trade operations and to support local industries by ensuring that Australian businesses do not face undue competition from locally produced substitutes. The policy objective is to foster a competitive environment where Australian industries can thrive without being hampered by excessive customs duties on certain imported goods, thereby supporting economic growth and international trade.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to persons or entities seeking lower customs duty rates for specific goods by applying for a TCO. The application of the Act is national in scope, as it pertains to the Commonwealth level of government. TCOs apply to goods specified in an application, provided the application meets core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The process involves assessing whether no substitutable goods are produced in Australia and whether the application aligns with the conditions set forth in the Act. Notably, certain goods, as specified in section 269SJ, are excluded from the TCO scheme. The Act also facilitates the publication of notices in the Gazette to invite submissions from interested parties, although no submissions were received for TCO No. 1108504. The TCO comes into effect on the date the application is lodged, and it does not retroactively disadvantage any person or impose new liabilities, only benefiting the rights of importers who can apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 1108504, under the Customs Act 1901, sets forth a tariff concession order (TCO) concerning certain blast furnace refractory bricks and/or shapes. According to section 269F of the Act, a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO is satisfied that the application pertains to goods not specified in section 269SJ and meets the core criteria as outlined in section 269C, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). The TCO declares that these specific goods are subject to item 50 of Schedule 4, which sets a duty rate of free, whereas the general rate of duty is 5%.
The Act imposes certain obligations on the parties involved. Firstly, a person seeking a TCO must submit an application to the CEO, who then assesses whether the application meets the core criteria. The CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions, indicating a lack of opposition to the TCO. Additionally, the TCO does not affect the rights of any person as at the date of registration, thereby ensuring that no individual is disadvantaged or imposed with liabilities for actions taken prior to the TCO's registration (subsection 269S(1)). Importers, however, will benefit from the rights conferred by this TCO, such as the ability to apply for a refund of duty on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).
For breaches of the provisions under the Customs Act 1901, the Act includes several potential consequences. While the explanatory statement does not detail specific offences or penalties related to the TCO in question, general provisions under the Customs Act outline the penalties for various breaches. For instance, knowingly or recklessly making a false statement in an application or providing false information can result in fines, imprisonment, or both. The maximum penalties can vary significantly depending on the severity and intent behind the offence. Furthermore, failure to comply with any requirements or provisions of the Act, including those related to tariff concession orders, could result in civil or criminal liability, with penalties determined by the specific breach and the discretion of the courts.
In conclusion, Tariff Concession Instrument No. 1108504, under the Customs Act 1901, provides a framework for granting tariff concessions on certain blast furnace refractory bricks and/or shapes. It outlines the process for applying for a TCO, the obligations of the CEO in assessing and granting such concessions, and the rights of importers. The Act also sets out potential consequences for breaches, although specific penalties are not detailed in the explanatory statement provided.