EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1110718
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 refractory lance end caps on 29 March 2011.
Instrument
TCO No 1110718 was made on 20 June 2011. It declares that those certain blast furnace refractory lance end caps 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. 1110718 is taken to have come into force on 29 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, serves to regulate and control the import and export of goods within Australia. The Act provides a framework for the application of customs duty on imported goods and also includes provisions for tariff concession orders. The Tariff Concession Instrument No. 1110718, made under the authority of the Customs Act 1901, was introduced to address a specific issue concerning the importation of certain blast furnace refractory lance end caps. The instrument, created on 20 June 2011, was in response to an application by Bluescope Steel, aiming to provide tariff concessions for these goods by setting their customs duty rate at free, contrasting with the general rate of 5%. This concession was granted because, on the date of the application, no substitutable goods were produced in Australia, satisfying the core criteria outlined in the Act. The policy objective of this concession is to encourage the import of specific goods that are not locally produced, thereby potentially benefiting importers who can claim duty refunds for goods imported since the instrument's effective date of 29 March 2011.
Scope and Application
The Tariff Concession Instrument No. 1110718, issued under the Customs Act 1901, applies to certain blast furnace refractory lance end caps by providing a concession on customs duty for these goods. This instrument is applicable to any person or entity that imports these specific goods into Australia. The geographic reach of the Act is national, as it is administered under Commonwealth law. The Act allows for the concession of customs duty if certain criteria are met, specifically if no substitutable goods are produced in Australia at the time the application is lodged. The CEO of Customs must ensure that the application complies with the core criteria, including the absence of substitutable goods produced domestically. This instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The Tariff Concession Order (TCO) takes effect from the date the application was lodged, in this case, 29 March 2011. Any subordinate instruments or regulations related to this TCO would further define the specific operational details and requirements for its application.
Key Provisions
The main operative sections of this instrument focus on the process for applying for, and making, a Tariff Concession Order (TCO) under the Customs Act 1901. According to section 269F, a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then determine if the application meets the core criteria set out 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 CEO is satisfied that the application meets the criteria, they must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by the Customs Act 1901 on the parties involved include ensuring that any application for a TCO is made in accordance with the requirements of section 269F and that the CEO reviews the application against the criteria in section 269C. The CEO must also publish a notice in the Gazette under section 269K(1) to invite submissions from any interested parties regarding the application. In this instance, no submissions were received in response to the notice published. Once a TCO is made, it is considered to have come into force on the day the application was lodged (subsection 269S(1)).
Under this legislation, any person who contravenes the provisions of the Customs Act 1901 or the regulations may be subject to civil or criminal penalties. For instance, section 156 of the Customs Act 1901 provides for penalties for providing false or misleading information in connection with an application for a TCO, which may include fines up to 10,000 penalty units or imprisonment for five years, or both. Additionally, subsection 270(2) of the Act allows for the imposition of financial penalties for non-compliance with the requirements of a TCO, which may include fines up to 11,000 penalty units. It is important for all parties involved to adhere to the obligations and requirements set out in the Act to avoid any potential penalties or consequences.