EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129188
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 taphole parts on 26 August 2011.
Instrument
TCO No 1129188 was made on 07 November 2011. It declares that those certain blast furnace taphole 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. 1129188 is taken to have come into force on 26 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, enacted by the Commonwealth Parliament, provides a framework for the administration of customs and excise duties in Australia. Specifically, Part XVA of the Act outlines a scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to reduce the customs duty on certain goods. This scheme was introduced to address the need for tariff concessions to facilitate the importation of goods that are not produced domestically or are substitutable by imported goods. The policy objective is to support Australian industries by providing a tariff reduction where it is demonstrated that no suitable Australian-made alternatives exist. In line with this policy, Bluescope Steel applied for a TCO for certain blast furnace taphole parts, and after meeting the core criteria, the CEO issued Tariff Concession Order No. 1129188 on 7 November 2011, effectively reducing the duty on these specific goods from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 1129188, made under the Customs Act 1901, applies to certain blast furnace taphole parts and is designed to provide tariff concessions for these goods. The Act facilitates the application for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which, if approved, can result in a lower rate of customs duty on the specified goods. This legislation is particularly relevant for entities involved in the importation of these parts, granting them tariff relief by making the duty rate free, as opposed to the general rate of 5% applicable to similar goods. The instrument extends to the national level and is subject to the Commonwealth jurisdiction, affecting the rights of importers beneficially by allowing them to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force. The CEO, in making this TCO, ensures that the application meets the core criteria specified in the Act, such as the absence of substitutable goods produced in Australia in the ordinary course of business. This legislation does not impose any liabilities on any person and does not disadvantage or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration.
Key Provisions
The Tariff Concession Instrument No. 1129188 (TCO No. 1129188) under the Customs Act 1901 applies to specific blast furnace taphole parts, as declared in item 50 of Schedule 4 to the Customs Tariff Act 1995. Section 269P(3) of the Customs Act mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application for a Tariff Concession Order (TCO) meets the core criteria, they must issue a written order declaring the specified goods subject to a reduced duty rate. For these particular blast furnace taphole parts, the general duty rate is 5%, but the TCO stipulates a duty rate of free (sections 269F and 269P).
The Customs Act imposes certain obligations on parties applying for a TCO. Under section 269F, an application must be made to the CEO for a TCO concerning the goods in question. Section 269C sets the core criteria that the CEO must assess, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D. This criterion ensures that the TCO benefits goods that cannot be replaced by domestic production. Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO. In this case, no submissions were received, facilitating the issuance of the TCO.
Failure to comply with the provisions of the Customs Act or the specific TCO could result in legal consequences. While the explanatory statement does not explicitly detail penalties, breaches of the Customs Act generally may lead to civil or criminal penalties. For example, section 287 of the Customs Act provides for a maximum penalty of 5,000 penalty units or imprisonment for five years, or both, for breaches such as making false statements or evading duty. The Act also allows for the recovery of unpaid duty and interest. The absence of specific penalties in this context implies that the standard penalties under the Customs Act would apply if any violations occur.
In summary, TCO No. 1129188 establishes a zero duty rate for certain blast furnace taphole parts, provided that no substitutable goods are produced in Australia. The CEO must ensure the application meets the core criteria and publish an invitation for submissions, which was not received in this instance. The TCO does not impose liabilities on any person but allows importers to apply for duty refunds. Breaches of the Customs Act, while not detailed in this specific context, generally attract significant penalties under section 287.