EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129962
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 diverters on 02 September 2011.
Instrument
TCO No 1129962 was made on 28 November 2011. It declares that those certain diverters 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. 1129962 is taken to have come into force on 02 September 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, within Australia. This Act provides the framework for administering customs and excise duties, and includes provisions for tariff concession orders (TCOs) to be issued by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 1129962, issued in 2011, is an example of how the Customs Act facilitates the reduction of customs duties on specific goods, thereby addressing the economic needs of businesses by lowering import costs and potentially increasing competitiveness. The instrument was created following an application by Bluescope Steel Ltd for tariff concessions on certain diverters, and it became effective from the date of the application. This process ensures that the application of tariff concessions is transparent and allows for public consultation, although in this instance, no submissions were received. The objective is to balance the interests of businesses with the fiscal responsibilities of the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1129962, under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) to specific goods, in this case, certain diverters. This instrument applies to entities that import these goods, thereby granting them a tariff concession that reduces their customs duty obligations from the general rate of 5% to a free rate. The legislation allows the Chief Executive Officer of Customs to assess and approve applications for TCOs if certain criteria are met, including the absence of substitutable goods produced in Australia. The application of this legislation is national, affecting importers across Australia, and it is enacted in accordance with the provisions of the Customs Act 1901 and the Customs Tariff Act 1995. The instrument does not disadvantage existing rights of persons other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to its commencement on 02 September 2011.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 1129962, pertain to the process and criteria for making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the application is valid and meets the core criteria outlined in section 269C, the CEO must make a written TCO. This order declares that the specified goods are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995, with a reduced rate of customs duty. The process ensures that the application is reviewed to ascertain whether the goods are not substitutable by Australian-produced goods, as defined in section 269D and section 269E.
The Act imposes several obligations and requirements on the parties involved. An applicant seeking a TCO must ensure that their application is complete and valid, as per section 269F. The CEO, upon receiving a valid application, must determine whether the application meets the core criteria, specifically checking that no substitutable goods are produced in Australia, as per section 269C. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as required by subsection 269K(1). Failure to comply with these obligations could result in the application not being processed or the TCO not being granted.
In terms of penalties and consequences, the Act does not explicitly detail civil or criminal penalties for non-compliance with the TCO provisions. However, any breaches related to the application process or misuse of a TCO could lead to legal challenges or disputes. Importers who do not follow the correct procedures for claiming duty refunds under the TCO may face administrative consequences, such as fines or other financial penalties, as outlined in the relevant regulations. The Act ensures that the TCO does not affect pre-existing rights or impose liabilities on persons other than the Commonwealth.