EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1109109
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.
Laverton Steel Mill applied for a TCO in respect of certain tilting electric arc furnace parts on 16 March 2011.
Instrument
TCO No 1109109 was made on 06 June 2011. It declares that those certain tilting electric arc furnace 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. 1109109 is taken to have come into force on 16 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. Specifically, it establishes a process under which Tariff Concession Orders (TCOs) may be issued to reduce customs duty on certain imported goods. This mechanism was introduced to address the gap in ensuring fair trade practices and providing competitive advantages to Australian industries. The Tariff Concession Instrument No. 1109109, made on 6 June 2011, is one such instance where the Chief Executive Officer of Customs granted a concession following an application by Laverton Steel Mill for certain tilting electric arc furnace parts. The policy objective is to ensure that no substitutable goods are produced in Australia, thus benefiting the rights of importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1109109, made under the Customs Act 1901, applies specifically to certain tilting electric arc furnace parts, following an application by Laverton Steel Mill. The instrument grants a tariff concession to these goods, effectively reducing the customs duty rate from the general 5% to free, provided the application meets the core criteria as defined in section 269C of the Act. The application must be for goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a Tariff Concession Order (TCO). This concession applies to the goods as of the date the application was lodged, 16 March 2011, and the CEO was satisfied that no substitutable goods were produced in Australia. The instrument extends the scope of the Customs Act by providing a mechanism for tariff concessions, but it is subject to the specific conditions outlined in the Act, including the requirement that no submissions opposing the concession were received following the CEO's notice in the Gazette. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The main operative sections of the Customs Act 1901, specifically as they pertain to Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. If the CEO determines that the application meets the core criteria, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business (section 269C), the CEO must make a written order, known as a TCO (section 269P). Section 269P(3) specifies that this order declares that the goods in question are subject to a prescribed rate of duty in the Customs Tariff Act 1995. The terms 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are defined in sections 269D, 269E, and 269B, respectively.
The Act imposes several obligations on the parties involved. Firstly, any person seeking a tariff concession must submit an application to the CEO under section 269F. The CEO must then assess whether the application meets the core criteria outlined in section 269C. If the application is deemed valid, the CEO is required to make a TCO as per section 269P. Additionally, upon receiving a valid TCO application, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit submissions if they believe the TCO should not proceed. The CEO must consider any submissions received before making a final decision.
In terms of potential breaches and consequences, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the TCO provisions. However, non-compliance with the Act's requirements could potentially lead to administrative actions, fines, or other legal repercussions under the broader legislative framework. The TCO itself does not impose any liabilities on any person, but it does affect the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect, as specified under paragraph 126(1)(r) of the Regulations.