EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1124301
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 hopper parts on 21 July 2011.
Instrument
TCO No 1124301 was made on 12 October 2011. It declares that those certain blast furnace hopper 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. 1124301 is taken to have come into force on 21 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for administering customs and excise duties, as well as for regulating the importation and exportation of goods. The Tariff Concession Instrument No. 1124301, made under this Act in 2011, addresses the issue of providing tariff concessions on specific imported goods where there are no substitutable goods produced in Australia. This instrument was introduced to ensure that industries that rely on imported goods for their production processes are not unduly disadvantaged by high tariff rates, provided that the imported goods are not being produced domestically. The policy objective here is to foster competitive and efficient markets by reducing the cost of essential imported inputs, thereby supporting Australian industries in their operations and competitiveness. The instrument ensures that the rights of existing importers are protected and allows for the refund of duties paid on eligible goods imported since the concession came into effect.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCO) established under Part XVA, allows for a reduced rate of customs duty on specified goods, subject to certain criteria. The Act applies to any individual or entity seeking a concession on the customs duty of goods by applying for a TCO with the Chief Executive Officer of Customs (CEO). The CEO is required to ensure that the goods in question are not prohibited from TCO consideration and meet the specified core criteria, primarily that no substitutable goods are produced in Australia at the time of application. The geographic reach of the Act is national, with the concessions applying throughout Australia. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage existing rights as of the registration date. The application of the Act can be extended or clarified through subordinate instruments, which may provide further detail on the interpretation and application of the core criteria and the process for making and reviewing TCOs. The Explanatory Statement for Instrument No. 1124301 outlines a specific instance where Bluescope Steel successfully applied for a TCO concerning blast furnace hopper parts, resulting in a zero-rate customs duty for these goods, effective from the date of the application.
Key Provisions
The Tariff Concession Order No. 1124301, made under section 269F of the Customs Act 1901, applies to certain blast furnace hopper parts and provides that they are subject to a rate of duty that is free, rather than the general rate of 5%. This order was made following an application by Bluescope Steel on 21 July 2011, and it came into effect on the same day. The Chief Executive Officer of Customs (CEO) was satisfied that the application met the core criteria, which include the condition that no substitutable goods were produced in Australia on the day the application was lodged.
The CEO is required to publish a notice in the Gazette as soon as practicable after accepting a Tariff Concession Order (TCO) application as valid, inviting submissions from any person who believes the TCO should not be made. However, in the case of TCO No. 1124301, no submissions were received. The TCO does not affect the rights of any person other than the Commonwealth, as it is not retroactive. It also does not impose any liabilities on any person and can be beneficial to importers, who may apply for a refund of duty on goods imported since the TCO came into force.
Under the Customs Act 1901, the CEO is mandated to decide on the validity of a TCO application by assessing whether it meets the core criteria. These criteria, outlined in section 269C, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms 'goods produced in Australia', 'ordinary course of business' and 'substitutable goods' are defined in sections 269D, 269E, and 269F respectively. If the CEO determines that the application satisfies these conditions, they must make a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Failure to comply with the requirements of the Customs Act 1901 or the associated regulations may result in legal consequences. The Act and its regulations impose obligations on the parties and entities it governs, such as the requirement for the CEO to make a written order if the core criteria are met. If these obligations are not fulfilled, there could be civil or criminal consequences. While specific offences, penalties, or consequences are not detailed in the provided text, it is generally understood that breaches of customs legislation can result in penalties including fines and imprisonment, depending on the severity and intent of the breach.