EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1128500
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 furnace parts on 17 August 2011.
Instrument
TCO No 1128500 was made on 07 November 2011. It declares that those certain 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. 1128500 is taken to have come into force on 17 August 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, through its Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. Enacted by the Australian Parliament, the Act aims to provide relief from customs duty where applicable, facilitating trade by reducing the cost burden on importers of certain goods. The problem this legislation addresses is the potential financial strain on businesses and consumers caused by high customs duties on specific imported goods. Instrument No. 1128500, made under this Act, was introduced to provide a tariff concession for certain furnace parts applied for by Bluescope Steel. The policy objective is to ensure that when no substitutable goods are produced in Australia, the specified imported goods are granted a tariff concession, thereby promoting competitive pricing and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 1128500 under the Customs Act 1901 applies to specific goods for which an applicant has requested a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). This process is designed to grant lower customs duty rates for particular goods, provided they meet the criteria outlined in the Act. The Act applies to entities and individuals seeking tariff concessions for goods that are not specified as ineligible under section 269SJ of the Customs Act. The application must demonstrate that no substitutable goods are produced in Australia at the time of application, as per section 269C of the Act. The geographic reach of this legislation is national, as it pertains to the Customs Act 1901, which applies across Australia. However, the Act does not specify exclusions or exemptions beyond those detailed in section 269SJ. The application of the Act may be further defined through subordinate instruments, which may specify additional details or conditions for the implementation of TCOs.
Key Provisions
The main operative sections of this legislation pertain to the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided they are not specified in section 269SJ. Section 269C outlines the core criteria that must be satisfied for an application to be considered, namely that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied with the application, they must issue a written TCO.
The Act imposes specific obligations on the CEO, including the requirement to assess applications against the core criteria (section 269C), to publish a notice in the Gazette inviting submissions if an application is accepted as valid (subsection 269K(1)), and to make a written TCO if the application meets the criteria (subsection 269P(3)). The CEO must also ensure that any TCO does not disadvantage persons or impose liabilities on them in respect of actions taken before the TCO comes into force (subsection 269S(1)).
Under the Customs Act 1901, failure to comply with the requirements to make a TCO when criteria are met, or improper publication of notices, may lead to legal challenges or administrative actions. While the explanatory statement does not explicitly outline specific offences, penalties, or consequences for breaches of the TCO process, breaches of related customs duties or regulations could incur penalties. For instance, knowingly making a false statement or providing false information when applying for a TCO might result in civil or criminal penalties as per other relevant sections of the Customs Act 1901 or associated regulations. The precise penalties would depend on the nature and severity of the breach.