EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511362
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.
Hydro Aluminium Kurri Kurri Pty Ltd applied for a TCO in respect of certain anode haulers on 31 August 2005.
Instrument
TCO No 0511362 was made on 18 November 2005. It declares that those certain anode haulers 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. 0511362 is taken to have come into force on 31 August 2005.
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 Australian Parliament, establishes a framework for the imposition of customs duty on imported goods, among other things. The Act introduced Tariff Concession Orders (TCOs) as a means to provide tariff relief for certain goods that are not produced in Australia or are not substitutable with Australian-made goods. This concession is intended to benefit importers by reducing the customs duty burden on specific goods, thus facilitating trade and potentially lowering costs for businesses that import these goods. The Tariff Concession Instrument No. 0511362, made under the authority of the Act, provides a concrete example of how the TCO scheme operates by granting a tariff concession to Hydro Aluminium Kurri Kurri Pty Ltd for certain anode haulers. The policy objective here is to ensure that Australian importers are not placed at a competitive disadvantage in cases where no suitable domestic alternatives exist.
Scope and Application
The Tariff Concession Instrument No. 0511362, made under the Customs Act 1901, applies to the specific goods, in this case certain anode haulers, for which a Tariff Concession Order (TCO) has been requested and subsequently granted by the Chief Executive Officer of Customs. The application was made by Hydro Aluminium Kurri Kurri Pty Ltd on 31 August 2005, and the TCO was issued on 18 November 2005. The instrument provides a lower rate of customs duty for these goods, in this instance a rate of free duty compared to the general rate of 5%. The TCO applies nationally, and its issuance followed a process that included an invitation for public submissions, which in this instance, did not receive any responses. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities, though it does entitle importers of the specified goods to apply for a refund of duty paid on imports since the effective date of the TCO.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0511362 pertain to the granting of tariff concessions on certain goods under the Customs Act 1901. Specifically, section 269F allows for the application of Tariff Concession Orders (TCO) by interested parties, while section 269C outlines the core criteria that must be satisfied for an application to be successful. A TCO will be issued if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are produced in Australia, as defined by sections 269D and 269E, and the goods in question meet the specified criteria (section 269P(3)). The instrument in question, TCO No. 0511362, applies to certain anode haulers, reducing the customs duty rate from the general 5% to free.
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure that their applications meet the core criteria as set out in section 269C of the Act. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid (subsection 269K(1)). Additionally, the CEO must determine whether the application meets the core criteria and, if so, issue a TCO. For the goods in question, the TCO was issued on 18 November 2005, and it is taken to have come into force on the date the application was lodged, 31 August 2005 (subsection 269S(1)). The TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on such persons in respect of actions taken before the registration date.
In terms of potential breaches and consequences, the Act does not specify particular offences or penalties related to the issuance or application of a TCO. However, any misuse of a TCO, such as fraudulent claims for tariff concessions, could potentially lead to criminal charges under other sections of the Customs Act 1901. For example, knowingly making a false statement in an application could result in criminal penalties, including fines and imprisonment. Similarly, any failure to comply with the conditions of a TCO could lead to civil or administrative penalties, such as fines or the revocation of the TCO. It is important for applicants and importers to ensure compliance with all relevant provisions to avoid any adverse consequences.