EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111660
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 globe valves on 06 April 2011.
Instrument
TCO No 1111660 was made on 27 June 2011. It declares that those certain globe 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. 1111660 is taken to have come into force on 06 April 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, as supplemented by Tariff Concession Instrument No. 1111660, establishes a framework for the application of tariff concessions to certain goods. Enacted by the Australian Parliament, the Act aims to facilitate the import of goods by providing reduced customs duty rates under specific circumstances, thereby supporting trade and economic activities. The Instrument, made on 27 June 2011, addresses the problem of potentially high customs duties on specific goods by granting tariff concessions, as applied to certain globe valves in this instance. This measure ensures that no substitutable goods were produced in Australia, allowing for a zero percent duty rate on these valves, as opposed to the general 5% duty rate. The policy objective is to encourage the importation of these goods, aiding in the reduction of costs for businesses and potentially lowering prices for consumers.
Scope and Application
The Tariff Concession Instrument No. 1111660, which was made under Part XVA of the Customs Act 1901, applies to the specific goods in respect of which Bluescope Steel made an application for a Tariff Concession Order (TCO). This legislation enables the Chief Executive Officer of Customs to lower the rate of customs duty on certain goods, provided that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The TCO specifically applies to certain globe valves, which are now subject to a free rate of duty as opposed to the general rate of 5%. The application of the Act is limited to the goods specified in the TCO, and it does not affect the rights of any person other than the Commonwealth. Furthermore, the Act does not impose any liabilities on any person and provides for potential duty refunds to importers of these goods since the date the TCO is taken to have come into force. The scope of the Act is confined to the Commonwealth jurisdiction and extends through subordinate instruments as required to implement the tariff concessions.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1111660 under the Customs Act 1901 (section 269F) outline the process for applying for a Tariff Concession Order (TCO). An applicant, such as Bluescope Steel, can apply to the Chief Executive Officer of Customs (CEO) for a TCO to obtain a lower rate of customs duty for certain goods, provided the goods are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria set out in section 269C and 269P(3), a written TCO is issued. The CEO determines that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. In this instance, Bluescope Steel's application for globe valves was approved, resulting in Tariff Concession Instrument No. 1111660, which declares that the valves are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The obligations imposed by this legislation on the parties it governs primarily revolve around the application process for a TCO. The applicant must ensure their application complies with the Act's requirements, particularly that the goods do not fall under the categories excluded in section 269SJ. The CEO must carefully evaluate each application to determine if the core criteria are met. If satisfied, the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received. Upon approval, the CEO must issue a written TCO specifying the lower duty rate applicable to the goods in question.
There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of this particular TCO within the explanatory statement. However, general provisions under the Customs Act 1901 may apply to any breaches of the Act’s requirements, including potential civil or criminal penalties for non-compliance. These could involve fines or imprisonment, depending on the severity of the breach, as stipulated in other relevant sections of the Act. The focus here is on ensuring the tariff concession process is followed correctly to benefit eligible applicants without causing undue hardship or unfair advantage to any party.