EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1125316
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 metal parts on 28 July 2011.
Instrument
TCO No 1125316 was made on 31 October 2011. It declares that those certain metal 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. 1125316 is taken to have come into force on 28 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. 1125316, enacted in 2011 under the Customs Act 1901, aims to address the issue of providing tariff concessions for specific goods, thereby encouraging their import and use within Australia. This instrument was introduced by the Chief Executive Officer of Customs, who is tasked with deciding whether applications for tariff concession orders meet the necessary criteria, particularly focusing on whether substitutable goods are produced in Australia. The policy objective is to facilitate the importation of goods by reducing or eliminating customs duties where appropriate, provided no suitable domestic alternatives exist. This approach is intended to benefit importers by potentially reducing their duty costs and ensuring fair treatment in line with the provisions of the Customs Act 1901 and the Customs Tariff Act 1995.
Scope and Application
The Tariff Concession Instrument No. 1125316 under the Customs Act 1901 applies to Bluescope Steel’s application for a Tariff Concession Order (TCO) concerning certain metal parts, which was lodged on 28 July 2011. The Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for deciding whether to grant a TCO when an application is made by a person in respect of goods. The TCO applies specifically to the metal parts in question, which now attract a zero rate of duty as opposed to the general 5% duty rate. The instrument was made on 31 October 2011, and its effect is to provide tariff concessions for the specified goods from the date the application was lodged. The instrument does not affect any pre-existing rights of persons, except that it allows for the refund of duties paid on imports of these goods since the effective date of the TCO. There were no submissions opposing the TCO, indicating no objections were raised during the consultation period. The scope of the Act is thus limited to the specific goods and the tariff concessions applied to them, with no broader application to other entities, industries, or conduct.
Key Provisions
The Tariff Concession Instrument No. 1125316 under the Customs Act 1901 provides for a concession in the customs duty rate for certain metal parts (section 269C). Pursuant to section 269P(3), the Chief Executive Officer of Customs (CEO) issued this Instrument on 31 October 2011, declaring that these metal parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively imposing a zero rate of duty (section 269S(1)). This Instrument is effective as of the date of the application, 28 July 2011, and does not disadvantage any person or impose liabilities for actions prior to its registration (subsection 269S(1)).
The Act imposes certain obligations on the CEO and applicants. Section 269F allows any person to apply for a Tariff Concession Order (TCO) for goods, provided they do not fall under the exclusions specified in section 269SJ. The CEO must then determine if the application meets the core criteria outlined in section 269C, which requires that on the application date, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written TCO (subsection 269P(3)). Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
Failure to comply with the obligations and requirements set out in the Customs Act 1901 can result in civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally carry significant penalties, including fines and imprisonment. For example, under section 222 of the Customs Act 1901, a person who knowingly or recklessly makes a false statement in an entry or declaration can be subject to a fine of up to $22,200 or imprisonment for up to two years, or both. Additionally, failure to comply with a TCO or attempting to circumvent the provisions of the Customs Act 1901 can result in further penalties, including fines and imprisonment.