EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1122942
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 applied for a TCO in respect of certain blast furnace parts on 11 July 2011.
Instrument
TCO No 1122942 was made on 19 September 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. 1122942 is taken to have come into force on 11 July 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 Tariff Concession Instrument No. 1122942, enacted in 2011, is a legislative measure under the Customs Act 1901 designed to facilitate tariff concessions for specific goods. The Customs Act 1901 establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to reduce customs duties on certain goods. This initiative was introduced to address the need for facilitating trade by lowering the tariff rates on specific goods, thereby making them more competitive in the market. The instrument was enacted by the Parliament of Australia, aiming to ensure that the application process for tariff concessions is transparent and inclusive, inviting submissions from any interested parties to maintain fairness and accountability. The policy objective is to streamline trade processes by providing a mechanism for reducing duties on goods that are not produced domestically, thus promoting economic efficiency and benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1122942, pertains to the application and administration of Tariff Concession Orders (TCO) that provide concessional rates of customs duty for specified goods. This Act applies to individuals and entities that import goods into Australia and seek tariff concessions under the scheme established by the Act. The application process requires the Chief Executive Officer of Customs (CEO) to assess whether the goods in question meet the core criteria, specifically whether there are no substitutable goods produced in Australia at the time the application is made. The geographic reach of this Act is nationwide, applying across all states and territories within Australia, as it is a Commonwealth Act. The Act includes exclusions for goods specified in section 269SJ which cannot be subject to a TCO. The application of the Act may be extended or detailed further through subordinate instruments, such as the Customs Tariff Act 1995, which provides the schedule of duty rates applicable to various goods. This particular Instrument, TCO No. 1122942, applies to certain blast furnace parts, setting their duty rate to free, effective from the date of the application, 11 July 2011.
Key Provisions
The main operative sections of the Customs Act 1901, specifically as they relate to Tariff Concession Orders (TCOs), are found in sections 269C, 269B, and 269P. Section 269C (2) outlines the core criteria that must be met for a TCO application to be considered valid, which includes ensuring that no substitutable goods are produced in Australia at the time of the application. Section 269B defines the terms "goods produced in Australia", "ordinary course of business", and "substitutable goods". If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must issue a TCO under section 269P (3), declaring the specified goods as eligible for the concession.
The obligations and requirements imposed by the Act on parties or entities governed by it include the necessity for applicants to ensure that their applications meet the core criteria stipulated in section 269C. This involves demonstrating that no substitutable goods are produced in Australia at the time of application. Additionally, the CEO is mandated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested party to lodge submissions if they believe the TCO should not be made. If no submissions are received, the CEO must proceed with making the order. The Act also mandates that the TCO does not affect the rights of any person adversely as at the date of registration, nor impose any liabilities on any person in respect of actions taken before the date of registration.
Any breach of the provisions outlined in the Customs Act 1901 could result in various civil or criminal consequences. While the explanatory statement does not explicitly detail specific offences, penalties, or consequences for breach, the general framework under which the Customs Act operates suggests that breaches could lead to fines, imprisonment, or other penalties as prescribed by the Act or related legislation. The maximum penalties would depend on the specific nature and severity of the breach, in line with the general sanctions outlined in the Customs Act and other relevant laws. It is important for parties subject to these provisions to comply strictly to avoid any potential legal repercussions.