EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1115409
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 Pty Ltd applied for a TCO in respect of certain steel plate on 16 May 2011.
Instrument
TCO No 1115409 was made on 01 August 2011. It declares that those certain steel plate 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. 1115409 is taken to have come into force on 16 May 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 Commonwealth Parliament, established a framework for the imposition of tariffs on imported goods and the provision of tariff concessions. The Act was introduced to regulate the importation of goods and to provide for the collection of customs duty and other charges. The problem it addressed was the need for a structured approach to tariff management and the facilitation of trade through concessional measures. The Tariff Concession Order (TCO) scheme under Part XVA of the Act allows for the application of lower rates of customs duty on certain goods, provided specific criteria are met. The policy objective of this scheme is to support Australian industries by reducing the cost of imported raw materials and components, thereby making Australian manufactured goods more competitive in both domestic and international markets.
On 1 August 2011, the Chief Executive Officer of Customs issued Tariff Concession Order No. 1115409 in response to an application by Bluescope Steel Pty Ltd for tariff concessions on certain steel plates. The CEO determined that the application met the core criteria, as no substitutable goods were produced in Australia at the time of the application. Consequently, the order specifies that the certain steel plates are subject to a free rate of duty, as opposed to the general rate of 5%. The TCO came into effect on the date the application was lodged, 16 May 2011, and does not disadvantage any person or impose new liabilities on anyone other than the Commonwealth. Importers of the affected goods will be able to apply for refunds of duty paid on those goods since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 1115409, established under the Customs Act 1901, applies to any person or entity seeking a tariff concession order (TCO) for specific goods that would otherwise attract a customs duty. The instrument specifically addresses applications for concessions on certain steel plates, as exemplified by Bluescope Steel Pty Ltd's application. The instrument was made effective from 16 May 2011, the date on which the application was lodged, and it applies on a national level, governed by the Commonwealth. The geographic reach of this Act is thus national, applying across all states and territories of Australia. The Act provides that the TCO does not disadvantage any person other than the Commonwealth nor impose liabilities on such individuals for actions taken prior to the registration of the order. The Act, however, does not explicitly exclude any particular goods or entities from its scope, implying a broad application unless specific exclusions are defined in other sections of the Customs Act 1901 or the Customs Tariff Act 1995. The application of this Act may be further extended or restricted through subordinate instruments as deemed necessary by the Chief Executive Officer of Customs.
Key Provisions
The main operative sections of this legislation pertain to the process for applying for and making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods. Section 269C specifies the core criteria that must be met for an application to be valid, primarily that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If these criteria are satisfied, the CEO must make a written order, a TCO, which is detailed in section 269P(3) of the Act.
The obligations imposed by this legislation on the parties it governs are primarily on the applicant and the CEO. The applicant must ensure that their application for a TCO meets the core criteria set out in section 269C of the Act. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D, 269E, and 269F of the Act. The CEO, on receiving a valid application, is obligated to make a written TCO if the application meets the criteria outlined in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who might have reasons why the TCO should not be made, as per subsection 269K(1) of the Act.
The Act does not explicitly outline specific offences, penalties, or civil or criminal consequences for breaches of the TCO provisions. However, any failure to comply with the obligations set out, such as providing false information in an application or the CEO not adhering to the statutory requirements, could potentially lead to administrative or legal consequences under other related laws. The focus of the Act appears to be more on procedural compliance rather than punitive measures for breaches.