EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008764
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 smelter anode tender trucks on 18 February 2010.
Instrument
TCO No 1008764 was made on 30 April 2010. It declares that those certain smelter anode tender trucks 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. 1008764 is taken to have come into force on 18 February 2010.
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 to facilitate the regulation of customs and excise duties in Australia, ensuring a streamlined process for the importation and exportation of goods. One specific problem the Act addresses is the need for tariff concessions in certain circumstances to support industries and economic activities by lowering the customs duty on particular goods. Tariff Concession Orders (TCOs) allow for a reduced rate of customs duty on specified goods when certain criteria are met, such as when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 1008764, enacted in 2010, is a direct response to an application by Hydro Aluminium Kurri Kurri Pty Ltd for a tariff concession on certain smelter anode tender trucks. This instrument was developed by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO. This legislative measure ensures that the rights of importers are positively affected, allowing them to apply for refunds of duty on goods imported since the TCO's effective date.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for specific goods, allowing for a lower rate of customs duty. Applications for TCOs are processed under section 269F, provided the goods do not fall under the exclusions specified in section 269SJ. The CEO must determine if the application meets the core criteria, primarily that no substitutable goods are produced in Australia at the time of the application, as defined in sections 269C, 269D, 269E, and 269F. If satisfied, the CEO issues a TCO, as per section 269P, which sets the duty rate as specified in the Customs Tariff Act 1995. The TCO applies nationally, benefiting importers who can seek duty refunds for imports since the application date under the Customs Act Regulations. Notably, TCOs do not retroactively affect the rights or liabilities of non-Commonwealth entities.
Key Provisions
The key operative sections of this legislation pertain to the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Specifically, section 269F allows for the application for a TCO by any person, while section 269C stipulates the core criteria that must be met for such an application to be successful. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a TCO, which sets a reduced or free customs duty rate on the specified goods. This is illustrated in TCO No 1008764, where the smelter anode tender trucks are now subject to a free rate of duty, as opposed to the general rate of 5% (s269P(3)).
The Act imposes certain obligations and requirements on both the CEO and the applicants for a TCO. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO, and that the core criteria in section 269C are met (s269F, s269C). Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from interested parties (s269K(1)). Additionally, the CEO must make a written TCO if the core criteria are met. On the other hand, applicants must provide sufficient information to demonstrate that no substitutable goods are produced in Australia and that the goods in question are eligible for tariff concessions.
Any breaches of the provisions outlined in the Customs Act 1901 may result in both civil and criminal consequences. For instance, knowingly providing false information in an application for a TCO could lead to criminal charges under section 276 of the Act, which carries a maximum penalty of 10,000 penalty units. Civil penalties may also apply, such as fines or other monetary penalties, for non-compliance with the Act's provisions. Additionally, section 126 of the Customs Regulations 1993 allows for the imposition of financial penalties for failure to comply with customs regulations, which may include incorrect declarations or failure to pay duties owed. These penalties serve to enforce compliance and ensure the integrity of the tariff concession scheme.