EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116074
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.
Bluscope Steel Pty Ltd applied for a TCO in respect of certain blast furnace parts on 20 May 2011.
Instrument
TCO No 1116074 was made on 08 August 2011. It declares that those certain blast furnace parts 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. 1116074 is taken to have come into force on 20 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 Parliament of Australia, provides a framework for the administration of customs duties, including provisions for Tariff Concession Orders (TCOs) under Part XVA. The primary objective of this legislative instrument is to address the gap where certain goods, if imported, could potentially disrupt or negatively impact domestic industries by allowing for a lower rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 1116074 was introduced to provide tariff relief for particular blast furnace parts, effectively reducing the customs duty rate from the general rate of 5% to free. This was enacted following an application by Bluscope Steel Pty Ltd and subsequent satisfaction by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 1116074 under the Customs Act 1901 applies to specific goods, in this case certain blast furnace parts, and provides a concession on the rate of customs duty applicable to these goods. The Act applies to any person or entity seeking a tariff concession order (TCO) for goods that are not produced in Australia in the ordinary course of business. The CEO of Customs is the authority responsible for determining whether an application for a TCO meets the core criteria set out in the Act, specifically by ensuring that no substitutable goods are produced in Australia. This legislation has a Commonwealth jurisdictional reach and extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable tariff item for the goods in question. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth in respect of anything done or omitted to be done before the date of registration. Importers of these goods will be able to benefit from a refund of duty under certain conditions.
Key Provisions
The Tariff Concession Order No. 1116074, under the Customs Act 1901, is an instrument that allows for tariff concessions on certain blast furnace parts (sections 269C, 269P). This order was made by the Chief Executive Officer of Customs (CEO) on 8 August 2011, following an application by Bluscope Steel Pty Ltd on 20 May 2011. The CEO was satisfied that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria set out in section 269C of the Act. Consequently, the order declares that the specific blast furnace parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes certain obligations on the parties involved. For instance, section 269F of the Act allows any person to apply to the CEO for a Tariff Concession Order (TCO) in respect of goods. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid. Section 269S(1) specifies that a TCO is considered to come into force on the day the application for the TCO was lodged. The CEO must also ensure that the TCO does not affect the rights of any person, other than the Commonwealth, adversely as at the date of registration (subsection 269S(1)).
Entities and individuals governed by this Act must adhere to the outlined procedures for applying for and implementing TCOs. Specifically, applicants like Bluscope Steel Pty Ltd must demonstrate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The CEO must then evaluate the application against these criteria and make an informed decision. Additionally, the CEO is mandated to publish notices and consider any submissions received, ensuring a transparent process.
The Customs Act 1901 provides for various civil and criminal consequences for non-compliance with its provisions. While the specific penalties for breaches related to Tariff Concession Orders are not detailed in the explanatory statement, general provisions under the Act may include fines and other penalties. For instance, section 223 of the Act outlines offences and penalties for fraudulent or misleading statements made in connection with customs matters, with potential penalties including fines of up to $100,000 or imprisonment for up to two years, or both, for individuals, and higher penalties for corporations. These provisions ensure that the integrity of the customs system is maintained and that entities comply with the regulatory framework.