EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108559
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 applied for a TCO in respect of certain blast furnace material charging gate valves on 09 March 2011.
Instrument
TCO No 1108559 was made on 30 May 2011. It declares that those certain blast furnace material charging gate valves 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. 1108559 is taken to have come into force on 09 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, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties, including the process for Tariff Concession Orders (TCOs). The Act was amended to address gaps in the tariff concession scheme by allowing for tariff concessions on specific goods that are not produced in Australia. This helps to promote fair competition and supports Australian industries by ensuring that imported goods are not unfairly disadvantaged by local production. Tariff Concession Instrument No. 1108559, made under the Customs Act, was introduced to provide tariff concessions for certain blast furnace material charging gate valves, recognising that these goods are not produced in Australia and thus warrant a lower customs duty rate to support industry competitiveness. The instrument was created following an application by Bluescope Steel, and after consultation, it was determined that no submissions opposing the concession were received. The policy objective is to ensure that the tariff concessions do not disadvantage any person and to allow importers to apply for a refund of duties paid on these goods from the date the TCO was deemed to have come into force.
Scope and Application
The Tariff Concession Instrument No. 1108559 under the Customs Act 1901 applies to certain blast furnace material charging gate valves, specifically those for which Bluescope Steel submitted an application on 09 March 2011. The instrument, made on 30 May 2011, provides tariff concessions for these goods, reducing the general rate of duty from 5% to free. This concession is available only if the Chief Executive Officer of Customs is satisfied that no substitutable goods were produced in Australia at the time of the application, in line with the criteria specified in section 269C of the Act. The instrument affects the rights of importers, allowing them to apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force, without imposing any liabilities on any person.
The geographic and jurisdictional reach of this legislation is federal, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The instrument itself applies nationally, affecting all importers of the specified goods across Australia. There are no exclusions or exemptions specified within this particular instrument, and it does not affect the rights of any person as at the date of registration. The application of the instrument can be extended or restricted through subordinate instruments, which may provide further detail on the types of goods eligible for tariff concessions or modify the conditions under which such concessions are granted.
Key Provisions
The Tariff Concession Instrument No. 1108559, made under section 269C of the Customs Act 1901 (the Act), sets out the conditions for a concession on customs duty for certain blast furnace material charging gate valves. Section 269C specifies that a Tariff Concession Order (TCO) may be granted if, at the time of application, there are no substitutable goods produced in Australia. In this case, the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were being produced in Australia, thereby meeting the core criteria for a TCO. Consequently, the CEO issued TCO No. 1108559, which declares that the specified blast furnace material charging gate valves are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the rate of duty set at free, whereas the general rate is 5%.
The obligations imposed by the Act on the parties involved are primarily centred around the application process and the conditions for granting a TCO. Under section 269F, an applicant such as Bluescope Steel must submit an application to the CEO for a TCO. The CEO must then assess whether the application meets the core criteria, which includes determining whether substitutable goods are produced in Australia. This assessment is made under section 269C, which necessitates that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, under section 269K, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions regarding the application. Although Bluescope Steel's application did not elicit any submissions, the CEO is mandated to consider any valid submissions received.
Failure to comply with the provisions of the Act or the conditions of a TCO could result in various consequences. While the explanatory statement does not explicitly outline specific offences or penalties for breaching the Act or the TCO, it is reasonable to infer that any non-compliance could lead to legal actions under the broader Customs Act 1901. These could include fines or other penalties as prescribed by the Act, depending on the nature and severity of the breach. Additionally, any misrepresentation or fraudulent application could potentially lead to criminal charges under related Commonwealth legislation, with penalties varying based on the offence's gravity. The precise penalties for breaches are not detailed in the explanatory statement but are likely to be significant given the regulatory context.