EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118047
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 Ltd applied for a TCO in respect of certain chemical pumps on 06 June 2011.
Instrument
TCO No 1118047 was made on 22 August 2011. It declares that those certain chemical pumps 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. 1118047 is taken to have come into force on 06 June 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 imposition of customs duties and other charges on imported goods. It was introduced to address the need for a systematic approach to regulating the importation of goods and collecting duties. One mechanism within this framework is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duties on certain goods under specific conditions. The Tariff Concession Instrument No. 1118047, issued on 22 August 2011, exemplifies this process by granting BlueScope Steel Ltd a concession on certain chemical pumps, effectively reducing the duty rate from 5% to free. This instrument was designed to ensure that the rights of importers are positively impacted without imposing any new liabilities or disadvantaging any person as of the registration date. The process involved publication of the application in the Gazette, inviting submissions from interested parties, none of which were received, thereby allowing the concession to proceed smoothly.
Scope and Application
The Tariff Concession Instrument No. 1118047 under the Customs Act 1901 applies to BlueScope Steel Ltd and the specific chemical pumps they sought a tariff concession for. The instrument is issued by the Chief Executive Officer of Customs (CEO) and is intended to lower the rate of customs duty on certain goods, in this case chemical pumps, to zero if certain criteria are met. The application of this Act is national, as it pertains to the Commonwealth of Australia and its customs regulations. The primary exclusion noted in the Act is that goods specified in section 269SJ cannot be subject to a tariff concession order (TCO). The application process requires that no substitutable goods are produced in Australia at the time the application is lodged, ensuring that the concession does not undermine local production. The TCO does not disadvantage any person by affecting their rights as of the date of registration, and importantly, it does not impose any liabilities on any person, including the Commonwealth. The rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the TCO came into effect on 6 June 2011.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, and 269P. Section 269F allows for the application of a TCO for goods by any person to the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application meets the core criteria outlined in section 269C, such as the absence of substitutable goods produced in Australia on the date the application was lodged, a TCO may be issued under section 269P. This order effectively alters the customs duty rate for the specified goods, providing tariff concessions.
Entities and individuals governed by the Customs Act 1901, particularly those applying for TCOs, must ensure their applications are made in accordance with the stipulated criteria. This includes providing detailed information about the goods in question and satisfying the CEO that no substitutable goods are produced in Australia. Moreover, the CEO has a responsibility to review applications and, if necessary, publish a notice in the Gazette inviting public submissions on the proposed TCO, as mandated by section 269K(1).
The Act outlines specific consequences for non-compliance with the provisions related to TCOs. While the explanatory statement does not detail criminal offences or penalties, it is understood that breaches of customs laws can result in civil or criminal penalties. These may include fines and imprisonment, depending on the severity of the violation and the discretion of the court. The exact penalties would be determined by the relevant sections of the Customs Act 1901 and other applicable legislation, which could vary widely based on the circumstances of the breach.