EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111756
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 steel injection station steel sample distribution system on 07 April 2011.
Instrument
TCO No 1111756 was made on 04 July 2011. It declares that those certain steel injection station steel sample distribution system 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. 1111756 is taken to have come into force on 07 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, enacted by the Parliament of Australia, establishes a framework for the imposition of customs duties and provides for tariff concession orders (TCOs) under Part XVA. This legislative provision was introduced to address the gap in providing tariff concessions for specific goods, ensuring that such concessions are granted when there are no substitutable goods produced domestically. In the case of Tariff Concession Order No. 1111756, made under the authority of the Act, Bluescope Steel applied for and was granted a concession on certain steel injection station steel sample distribution systems, effective from 7 April 2011, when the application was lodged. The policy objective here is to facilitate the importation of goods that are not domestically produced, thereby supporting trade and potentially reducing costs for importers.
Scope and Application
The Tariff Concession Instrument No. 1111756 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO). In this instance, the Act applies to Bluescope Steel's application for a TCO in respect of certain steel injection station steel sample distribution systems, which was lodged on 07 April 2011. The Act mandates that the Chief Executive Officer of Customs (CEO) must consider whether the application meets the core criteria, which include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO must issue a TCO, as occurred in this case, declaring that the specified goods are subject to a lower rate of customs duty. The instrument exempts these particular goods from the general rate of duty of 5% and instead imposes a duty-free rate, effective from the date the application was lodged. The TCO does not adversely affect any existing rights of persons other than the Commonwealth, nor does it impose any new liabilities on them. Importers of these goods, however, will benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date. The instrument does not include any exclusions, exemptions, or thresholds beyond those specified in the Act and its subsidiary legislation.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1111756 under the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCO) by entities such as Bluescope Steel, which can be approved by the Chief Executive Officer of Customs (CEO). If the CEO determines that no substitutable goods are produced in Australia and that the application meets the core criteria (section 269C), a TCO is issued, which provides for a lower rate or exemption from customs duty for the specified goods (section 269P(3)). This particular instrument, TCO No. 1111756, applies to certain steel injection station steel sample distribution systems, reducing the duty from the general rate of 5% to free.
The Act imposes specific obligations on the CEO, including the requirement to decide whether an application for a TCO meets the core criteria (section 269C) and to make a written order if satisfied. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made (subsection 269K(1)). In the case of TCO No. 1111756, no submissions were received, indicating a lack of opposition to the concession. Additionally, the Act stipulates that a TCO comes into force on the date the application is lodged (subsection 269S(1)), which for TCO No. 1111756 was 07 April 2011.
Any breach of the conditions stipulated in the Customs Act 1901 may lead to civil or criminal consequences. However, the explanatory statement does not detail specific offences or penalties related to TCO applications or the failure to comply with them. The potential penalties for breaches of the Customs Act generally can vary widely, depending on the nature and severity of the breach, and may include fines or imprisonment. The specific penalties would be determined by the relevant courts based on the circumstances of each case.