EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1124692
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 tower packings on 21 July 2011.
Instrument
TCO No 1124692 was made on 12 October 2011. It declares that those certain chemical tower packings 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. 1124692 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 Australian Parliament, provides a framework for the regulation of customs duties and the facilitation of trade. One specific instrument under this Act is Tariff Concession Instrument No. 1124692, made in 2011 by the Chief Executive Officer of Customs. This instrument aims to address the issue of ensuring that certain goods, specifically chemical tower packings in this case, receive appropriate tariff concessions when no substitutable goods are produced in Australia. The objective is to ensure that the application of tariff concessions does not disadvantage Australian producers and aligns with the broader policy of facilitating trade and supporting industry competitiveness. The instrument, which came into effect on the date the application was lodged, allows for a refund of duty for importers of the specified goods from the date of its registration, without imposing any new liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 1124692 under the Customs Act 1901 applies to Bluescope Steel Ltd in relation to certain chemical tower packings, which are the subject of the instrument. This legislation allows for the application of a lower rate of customs duty on these goods. The Act is applicable at a Commonwealth level, providing a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concession orders (TCO) for goods specified by an applicant. The application process involves ensuring that no substitutable goods are produced in Australia at the time of application, and the CEO must consider whether the application meets the core criteria as outlined in the Act. The geographic reach of this Act is national, as it operates under federal jurisdiction. While the Act provides a clear process for applying for and granting tariff concessions, it does not impose any liabilities on individuals or entities other than the Commonwealth, and it does not disadvantage any person by affecting their rights as at the date of registration. The instrument extends its application through subordinate instruments such as the Customs Tariff Act 1995 and the Customs Regulations 1998.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Section 269F allows any person to apply to the CEO for a TCO in respect of goods, provided the goods are not those specified in section 269SJ, which are ineligible for TCOs. Upon receiving an application, the CEO must determine if it meets the core criteria set out in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This definition of substitutable goods is further clarified in sections 269D and 269E of the Act. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the parties by the Act include the requirement for the CEO to assess each TCO application against the criteria specified in section 269C. If the CEO determines that the application meets these criteria, they must issue a TCO that provides a lower rate of customs duty for the specified goods. Additionally, the CEO is mandated by section 269K(1) to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration to their disadvantage or impose any liabilities on any person in respect of actions taken before the date of registration.
In terms of penalties and consequences, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach in the context of TCOs. However, non-compliance with the terms of a TCO or the process for obtaining one could potentially lead to legal challenges or administrative actions. For example, if the CEO issues a TCO incorrectly, this could be subject to judicial review, and any party adversely affected by such an incorrect decision could seek redress in the courts. Additionally, any person who knowingly imports goods that do not qualify for the reduced duty rate under a TCO may face penalties under the Customs Act for incorrectly claiming tariff concessions, which could include fines or other administrative penalties as prescribed by the Act.