EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116081
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 rotary unions, rotary joints, rotary couplings and/or rotary distributors on 20 May 2011.
Instrument
TCO No 1116081 was made on 19 August 2011. It declares that those certain rotary unions, rotary joints, rotary couplings and/or rotary distributors 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. 1116081 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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia. The Act includes provisions for the imposition of duties and the administration of customs and excise laws. One of the mechanisms under the Customs Act is the Tariff Concession Order (TCO), which allows for reduced customs duty rates on specified goods. The Tariff Concession Instrument No. 1116081 was introduced to address the specific need of Bluescope Steel (AIS) Pty Ltd for lower customs duties on certain rotary unions, rotary joints, rotary couplings, and rotary distributors. This instrument was made by the Chief Executive Officer of Customs after an application was submitted and after it was determined that no substitutable goods were produced in Australia at the time of the application. The instrument aims to provide tariff relief, thus facilitating trade and potentially benefiting importers who can claim refunds on duties paid prior to the instrument's effective date. The Tariff Concession Instrument No. 1116081 came into force on 20 May 2011, the date the application was lodged, and it does not affect the rights of any person adversely or impose new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods for which a lower rate of customs duty is set, provided the goods are not listed in section 269SJ as ineligible for TCOs. An application for a TCO must meet core criteria specified in section 269C, notably that no substitutable goods were produced in Australia in the ordinary course of business on the application date, as defined by sections 269D and 269E. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, as occurred with Bluescope Steel (AIS) Pty Ltd's application for certain rotary unions, rotary joints, rotary couplings, and rotary distributors, which became effective on 20 May 2011. This TCO provides a zero duty rate for these goods, down from the general 5% duty rate. The legislation also mandates that the CEO must publish a notice in the Gazette, inviting submissions on the TCO application, although no submissions were received in this case. The TCO does not affect existing rights or liabilities of persons other than the Commonwealth, but does benefit importers by potentially allowing duty refunds for goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Order No. 1116081, made under the Customs Act 1901 (section 269F), pertains to specific rotary unions, rotary joints, rotary couplings, and rotary distributors. This order (section 269P(3)) applies a zero rate of customs duty to these goods, effective from the date the application was lodged, 20 May 2011 (subsection 269S(1)). The primary objective of this order is to provide a tariff concession for these goods, reducing the general duty rate of 5% to free (item 50 of Schedule 4 to the Customs Tariff Act 1995). The Chief Executive Officer of Customs (CEO) must ensure that no substitutable goods are produced in Australia on the day the application was lodged (section 269C). Substitutable goods are defined as those produced in Australia that could be used in the same manner as the goods in question (section 269D and section 269E).
The Customs Act 1901 imposes specific obligations on the CEO when processing an application for a Tariff Concession Order. Firstly, the CEO must determine whether the application is valid and not in respect of goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. If the application meets these preliminary criteria, the CEO must then verify that no substitutable goods were produced in Australia on the application date (section 269C). Should the CEO be satisfied that the core criteria are met, they are required to issue a written Tariff Concession Order specifying the goods and the applicable duty rate (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or submissions regarding the proposed concession (subsection 269K(1)).
Failure to comply with the requirements set forth in the Customs Act 1901 may result in civil or criminal penalties. Although the specific penalties are not detailed in the provided text, non-compliance with tariff regulations generally can lead to fines and potential legal action. For instance, incorrectly claiming tariff concessions or failing to report taxable goods accurately can result in significant financial penalties. The exact penalties would depend on the nature and severity of the breach, but they could include substantial fines or other legal repercussions as determined by the relevant authorities.
The Tariff Concession Order No. 1116081 does not adversely affect the rights of any person except the Commonwealth, ensuring that no one is disadvantaged or imposed with new liabilities for actions taken before the order's registration (subsection 269S(1)). Importers of the specified goods can benefit from this order by applying for a refund of any duty paid on goods imported since the order's effective date, as per paragraph 126(1)(r) of the Regulations. The order explicitly states that it does not impose any new liabilities on any person, thereby protecting existing rights and obligations under the Customs Act 1901.