EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041814
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.
Simcoa Operations applied for a TCO in respect of certain electric submerged arc furnace rotary table assembly on 10 September 2010.
Instrument
TCO No 1041814 was made on 06 December 2010. It declares that those certain electric submerged arc furnace rotary table assembly 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. 1041814 is taken to have come into force on 10 September 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, enacted by the Parliament of Australia, establishes a framework for the regulation of customs and excise duties. This Act, particularly its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aiming to address specific economic needs by allowing reduced customs duty rates on certain imported goods. The policy objective underpinning this legislative instrument is to promote economic efficiency and competitiveness by ensuring that certain goods, for which no suitable Australian-made alternatives exist, can be imported at a lower duty rate, thus benefiting both businesses and consumers. The Tariff Concession Instrument No. 1041814, made under this Act, is an example of how the scheme operates in practice, providing tariff concessions on specific electric submerged arc furnace rotary table assemblies, resulting in a zero duty rate for these goods as of 10 September 2010.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders are intended to provide a lower rate of customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The process begins with an application to the CEO by any interested party, and if the application is deemed to meet the core criteria, a TCO is issued, which declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For instance, TCO No 1041814 pertains to certain electric submerged arc furnace rotary table assemblies, reducing the duty rate from 5% to free. The CEO is obligated to publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received in this case. The TCO comes into effect on the date the application is lodged, without affecting the rights of any person prior to that date or imposing new liabilities. The geographic reach of the Act is national, as it applies across Australia under Commonwealth jurisdiction, with the TCO specifically affecting the rights and duties of importers of the specified goods.
Key Provisions
The Customs Act 1901, through its Part XVA, outlines a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (section 269F). These orders apply a lower rate of customs duty to specified goods. For an application to be considered, it must not be for goods specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria set out in section 269C of the Act, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269D and section 269E). If these criteria are met, the CEO is required to issue a written order (TCO) declaring that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by the Act on the parties involve ensuring that any application for a TCO is valid and meets the statutory criteria. The CEO must assess the application against the conditions specified in the Act, particularly that there are no substitutable goods produced in Australia. Additionally, the CEO has a duty to publish a notice in the Gazette inviting submissions from interested parties if a TCO application is accepted as valid (subsection 269K(1)). In the case of TCO No 1041814, the CEO followed these obligations by confirming that no substitutable goods were produced in Australia for the electric submerged arc furnace rotary table assembly, and subsequently published a notice with no objections received.
Failure to comply with the provisions of the Customs Act 1901, or attempting to circumvent the requirements for a TCO, can result in various consequences. While the Act does not explicitly detail the penalties for non-compliance or breaches, the general legal framework suggests that breaches may be subject to civil or criminal penalties. The specific nature and extent of these penalties would depend on the circumstances of the breach and could include fines or other sanctions as determined by the applicable laws. The Act ensures that the rights of importers are protected and can lead to refunds of duty for goods imported since the TCO is deemed to have come into force, as outlined in paragraph 126(1)(r) of the Regulations.