EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1124585
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 barrel reclaimer parts on 25 July 2011.
Instrument
TCO No 1124585 was made on 17 October 2011. It declares that those certain barrel reclaimer 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. 1124585 is taken to have come into force on 25 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 Australian Parliament, provides a framework for the regulation of customs and excise duties. It includes provisions for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the customs duty on specified goods. The 2012 Tariff Concession Instrument No. 1124585 was introduced to address the specific need for tariff concessions on certain barrel reclaimer parts, as applied by Bluescope Steel Ltd. The CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria under section 269C of the Act. Consequently, the Instrument declares that these parts are subject to a 5% duty rate, down from the general rate, effective from the date of application, 25 July 2011. This measure aims to support Australian industries by potentially lowering the cost of importing these particular goods, while ensuring that no existing rights or liabilities are adversely affected.
Scope and Application
The Tariff Concession Order (TCO) No. 1124585 under the Customs Act 1901 applies specifically to certain barrel reclaimer parts, which are goods that Bluescope Steel Ltd applied for a tariff concession on. This instrument allows for a lower customs duty rate, in this case, free duty, on these particular goods, provided they meet the criteria set out in the Act. The concession applies to goods imported after the date the application was lodged, which is 25 July 2011, and the TCO is considered to have come into force on that date. The scope of the Act pertains to the goods specified in the application and is limited to those that are not substitutable by goods produced in Australia in the ordinary course of business. The Chief Executive Officer of Customs (CEO) must ensure that the application meets the core criteria before making the written order. The TCO does not affect any rights of persons other than the Commonwealth and does not impose any liabilities on any person, while benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901, specifically section 269F, allow a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application meets the core criteria, outlined in section 269C, they must make a TCO. The core criteria require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. A substitutable good is defined in section 269D as goods produced in Australia that can be used in the same way as the goods for which the TCO is sought. Section 269P(3) stipulates that if the CEO is satisfied that the application meets these criteria, they must issue a written TCO.
Entities and individuals governed by this Act must meet several obligations. The CEO is required to publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to submit their concerns. This requirement is specified in subsection 269K(1) of the Act. In this instance, the CEO did not receive any submissions in response to this invitation. Moreover, the TCO does not affect the rights of any person as at the date of registration, ensuring that no one is disadvantaged or imposed with liabilities in respect of actions taken before the TCO was registered. Importers will have the benefit of being able to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
For any breach of the provisions set forth in the Customs Act 1901, specific offences, penalties, or civil and criminal consequences apply. However, the explanatory statement does not detail specific penalties for breaches of the Act in this context. In general, penalties for breaches of customs laws can include fines and imprisonment, with the exact penalties varying depending on the severity of the offence. It is important to note that the maximum penalties would be determined by the specific customs laws and regulations in place at the time of the breach.