EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113295
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 (AIS) Pty Ltd applied for a TCO in respect of certain steel ladle injection system wire feed machines on 20 April 2011.
Instrument
TCO No 1113295 was made on 11 July 2011. It declares that those certain steel ladle injection system wire feed machines 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. 1113295 is taken to have come into force on 20 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 Australian Parliament, provides a framework for the regulation of imports and exports through the imposition of customs duty on goods entering the country. One aspect of this regulation is the scheme for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. This scheme was introduced to address the need for flexible and responsive tariff measures to support Australian industries and maintain competitive trade practices. TCOs are made by the Chief Executive Officer of Customs, who must assess applications against specific criteria, including whether substitutable goods are produced in Australia. The Tariff Concession Instrument No. 1113295, made on 11 July 2011, is an example of such an order, providing a concession for certain steel ladle injection system wire feed machines. The policy objective behind TCOs is to ensure that Australian industries can access necessary goods at reduced costs, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 1113295, issued under the Customs Act 1901, applies specifically to the certain steel ladle injection system wire feed machines for which Bluescope Steel (AIS) Pty Ltd applied. The application of this instrument is contingent upon the CEO of Customs being satisfied that no substitutable goods are produced in Australia, as outlined in section 269C of the Act. This concession affects the duty rates of these goods, reducing the general rate of 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The geographic and jurisdictional reach of this Act is national, applying across Australia as it is governed under Commonwealth legislation. The CEO must publish a notice in the Gazette inviting submissions from any interested parties, though in this instance, no submissions were received. The TCO is effective from the date of the application, 20 April 2011, without retroactively affecting the rights or imposing liabilities on any person other than the Commonwealth. Importers of these goods will benefit from this concession, potentially applying for a refund of duty on imports since the effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1113295 (Tariff Concession Order) under the Customs Act 1901 (section 269P(3)) involve the declaration of certain steel ladle injection system wire feed machines as goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This means that these specific machines are now subject to a duty rate of free, instead of the general rate of 5% (section 269P(3)). The order specifies that the CEO was satisfied that no substitutable goods were produced in Australia (section 269C). To be eligible for this concession, the application must meet core criteria, including the absence of Australian-made goods that could replace the imported ones (section 269B).
The obligations imposed by the Act on the parties involved include ensuring that the application for a Tariff Concession Order (TCO) is lodged correctly and is not in respect of goods specified in section 269SJ, which outlines goods ineligible for TCOs (section 269F). The CEO is mandated to publish a notice in the Gazette, inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the TCO does not adversely affect the rights of any person as at the date of registration, nor impose liabilities on any person for actions taken prior to the registration (subsection 269S(1)).
Breaching the conditions set out in the Customs Act 1901 can lead to various consequences. For instance, failure to comply with the specified criteria for a TCO application could result in the application being rejected. Additionally, if a person knowingly makes a false statement in an application, they could face criminal charges under section 269GA of the Act, which carries a maximum penalty of $22,000 or imprisonment for one year, or both. Civil penalties may also apply for breaches of the Act, including fines and other remedies as deemed appropriate by the court.