EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138157
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 pumps on 15 November 2011.
Instrument
TCO No 1138157 was made on 08 February 2012. It declares that those certain pumps 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. 1138157 is taken to have come into force on 15 November 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 customs duties and related matters. The Act provides a framework for the administration of customs and excise duties, as well as the regulation of imports and exports. Tariff Concession Instrument No. 1138157 was introduced to address a specific gap in the duty regime for certain goods, as identified by an application from Bluescope Steel. This instrument was created under the authority of the Customs Act 1901 to provide a tariff concession for certain pumps, thereby offering a lower rate of customs duty for these goods. The policy objective of this instrument was to ensure that no substitutable goods were produced in Australia in the ordinary course of business, thereby allowing for the tariff concession to be granted. The instrument was made by the Chief Executive Officer of Customs after satisfying the core criteria outlined in the Act.
Scope and Application
The Tariff Concession Instrument No. 1138157 applies to specific goods, in this case certain pumps, and is administered under the Customs Act 1901. The Act authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that are not substitutable by goods produced in Australia and for which an application is made under section 269F. The instrument was made on 8 February 2012, in response to an application by Bluescope Steel on 15 November 2011, and is effective from the date the application was lodged. The instrument aims to provide tariff concessions, in this instance setting the duty on the specified pumps to free, as opposed to the general rate of 5%. The scope of the Act is such that it applies to any person or entity that imports goods eligible for a TCO, subject to the conditions specified in the Act. The geographic reach of the Act is national, applying across Australia in accordance with the Commonwealth's legislative powers under the Australian Constitution. There are exclusions under section 269SJ, which specifies goods that cannot be the subject of a TCO, and the Act may be extended or restricted by subordinate instruments, such as regulations or further TCOs, made under its authority.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1138157 under the Customs Act 1901 pertain to the granting of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods in question do not fall under the prohibited list specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, a written order is made declaring that the goods in question are subject to a lower rate of customs duty, in this case, free duty as opposed to the general rate of 5% (section 269P(3)). This particular instrument, TCO No. 1138157, applies to certain pumps, as it was declared that no substitutable goods were produced in Australia on the day the application was lodged.
The Act imposes certain obligations and requirements on the parties involved. Firstly, applicants such as Bluescope Steel must ensure that their applications are not in respect of goods specified in section 269SJ of the Act. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Once these criteria are met, the CEO must make a written TCO order (section 269P(3)).
The Act does not specify any offences, penalties, or civil or criminal consequences for breach of the Tariff Concession Orders provisions. However, it is implied that non-compliance with the provisions, such as submitting an application for goods that are ineligible for a TCO, could result in the CEO rejecting the application. Additionally, any person who intentionally provides false or misleading information in an application may be subject to penalties under other relevant legislation, such as the Crimes Act 1914. The Act ensures that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, and it does not impose any liabilities on any person (subsection 269S(1)).