EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129602
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 grinding wheels on 31 August 2011.
Instrument
TCO No 1129602 was made on 21 November 2011. It declares that those certain grinding wheels 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. 1129602 is taken to have come into force on 31 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, among other things. One of its key provisions is Part XVA, which establishes the framework for Tariff Concession Orders (TCOs). These orders, made by the Chief Executive Officer of Customs, provide for lower rates of customs duty on specified goods, subject to certain conditions. The Tariff Concession Instrument No. 1129602 was introduced to address a specific application from Bluescope Steel for tariff concessions on certain grinding wheels, aiming to ensure these goods attract a lower duty rate of free, as opposed to the general rate of 5%, provided no substitutable goods were produced in Australia at the time of application. The policy objective of this Instrument is to facilitate trade by reducing customs duty on specified imported goods, thereby potentially lowering costs for importers and encouraging the importation of these goods.
Scope and Application
The Tariff Concession Instrument No. 1129602, made under the Customs Act 1901, applies specifically to certain grinding wheels for which Bluescope Steel sought a tariff concession. The instrument is applicable to the import of these goods, granting them a concession from the general rate of duty of 5% to a duty-free status. This concession applies to entities importing these specific goods and is effective from the date the application was lodged, 31 August 2011. The instrument does not extend to any other goods or entities not specified in the application, and it does not affect the rights of any person as at the date of registration, ensuring that no individual or entity is disadvantaged or incurs liabilities for actions taken prior to the instrument's registration. The geographic reach of this Act is national, applying across Australia, as it pertains to the importation of goods into the country. Any exclusions or exemptions are detailed in section 269SJ of the Customs Act 1901, which lists goods ineligible for tariff concessions. The application of the Act may be further defined or extended through subordinate instruments, ensuring its provisions are effectively implemented.
Key Provisions
The key operative sections of this legislation are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) for certain goods. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these core criteria, section 269P requires the CEO to make a written order (a TCO), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S details the commencement of the TCO, stating that it is taken to have come into force on the day on which the application for the TCO was lodged.
The obligations imposed by this legislation on the parties it governs include the requirement for applicants to ensure that their TCO applications meet the core criteria outlined in section 269C. This means that the applicant must demonstrate that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO of Customs has the obligation to review the application, determine if it meets the core criteria, and if satisfied, to make a written TCO as required by section 269P. Additionally, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission, as per subsection 269K(1).
The legislation does not explicitly state any offences, penalties, or civil/criminal consequences for breach. However, any failure to comply with the conditions of the TCO could potentially result in a breach of the Customs Act 1901, which could lead to enforcement actions such as fines or other penalties as prescribed under the Act. The specific penalties would depend on the nature and severity of the breach, but they are not detailed within the explanatory statement of this particular instrument.