EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947932
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.
BHP Billiton Olympic Dam Corporation Pty Ltd applied for a TCO in respect of certain electric slag cleaning furnace elements on 09 December 2009.
Instrument
TCO No 0947932 was made on 26 February 2010. It declares that those certain electric slag cleaning furnace elements 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. 0947932 is taken to have come into force on 09 December 2009.
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, includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced rates of customs duty on specific goods. This scheme was introduced to address the need for tariff concessions in cases where substitutable goods are not produced domestically, thus encouraging the importation of certain goods and potentially lowering costs for businesses and consumers. Instrument TCO No. 0947932 was issued on 26 February 2010, following an application by BHP Billiton Olympic Dam Corporation Pty Ltd for tariff concessions on electric slag cleaning furnace elements. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria under the Act. This instrument declared that the specified furnace elements are subject to a zero rate of duty, as opposed to the general rate of 5%, and it came into effect on the date the application was lodged, 9 December 2009. The instrument was published in the Gazette with an invitation for submissions, none of which were received.
Scope and Application
The Tariff Concession Instrument No. 0947932 under the Customs Act 1901 pertains to the process of applying for Tariff Concession Orders (TCOs) to reduce the rate of customs duty on specific goods. The Act applies to any person or entity that can demonstrate the need for such concessions, particularly when the goods in question are not produced in Australia in the ordinary course of business and there are no substitutable goods available domestically. The geographic reach of this Act is nationwide, operating within the Commonwealth of Australia. The Act excludes goods specified in section 269SJ of the Customs Act, which lists items that cannot be subject to a TCO. The application process involves the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria before proceeding to issue a written order. The commencement of the TCO is effective from the date the application is lodged, and it does not affect existing rights or impose new liabilities on individuals or entities other than the Commonwealth. This legislative framework allows for the reduction of customs duties on specific imported goods, enhancing trade efficiency and potentially benefiting importers who can apply for duty refunds on goods imported since the TCO took effect.
Key Provisions
The Tariff Concession Order No. 0947932, made under section 269P of the Customs Act 1901, pertains to certain electric slag cleaning furnace elements, specifying that these goods will be subject to a concessional rate of duty, which is free, instead of the general rate of 5% (sections 269P(3), 50 of Schedule 4 to the Customs Tariff Act 1995). This concession was granted as the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). The order also ensures that the concession does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken before the date of registration (subsection 269S(1)).
The obligations imposed by this Act on the parties include the requirement for the Chief Executive Officer of Customs to consider an application for a Tariff Concession Order and determine if it meets the core criteria specified in the Act. The core criteria necessitate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO must also ensure that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the criteria, they must make a written order declaring the goods to which the concession applies (subsection 269P(3)).
In the event of a breach of the provisions outlined in the Customs Act 1901, various penalties and consequences may apply. While the Explanatory Statement does not explicitly mention specific penalties for breaches related to Tariff Concession Orders, the general framework of the Customs Act provides for both civil and criminal penalties for non-compliance. These can include fines, imprisonment, or both, depending on the nature and severity of the breach. The specific penalties are detailed in the relevant sections of the Customs Act and the Customs Regulations 1993. It is essential to refer to these sections for precise information on penalties and consequences.