EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048997
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.
Boyne Smelters Ltd applied for a TCO in respect of certain parts for a furnace tending assembly on 03 November 2010.
Instrument
TCO No 1048997 was made on 07 February 2011. It declares that those certain parts for a furnace tending 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. 1048997 is taken to have come into force on 03 November 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 Australian Parliament, provides a framework for the administration of customs and excise duties in Australia. It includes provisions for the creation of Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. The Tariff Concession Instrument No. 1048997, made under the authority of the Customs Act 1901, aims to address the issue of applying for tariff concessions for specific goods that are not produced domestically. The instrument was introduced to ensure that the application process for TCOs is transparent and allows for public consultation, as required by the Act. The policy objective is to facilitate the import of goods that are not produced in Australia, thereby benefiting importers by potentially reducing their duty costs and ensuring that the application process is fair and accessible.
Scope and Application
The Tariff Concession Order (TCO) No. 1048997 under the Customs Act 1901 applies to specific parts used in a furnace tending assembly, providing a concession on the customs duty for these goods. This order was issued following an application by Boyne Smelters Ltd, and it pertains to goods that, upon assessment by the Chief Executive Officer of Customs, were determined not to have substitutable alternatives produced in Australia. The scope of this Act extends to any person or entity that imports these particular goods, thereby directly affecting the rights of importers who can now benefit from a reduced or free customs duty on these items. The geographic reach of the Act is national, as it is a Commonwealth instrument, impacting all entities engaged in the import of these goods within Australia. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person other than the Commonwealth. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, which may provide further details or specific conditions for the application of the concession.
Key Provisions
The primary sections of this legislation, specifically under Part XVA of the Customs Act 1901, revolve around the establishment and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). A TCO application can be submitted to the Chief Executive Officer of Customs (CEO) by any person (section 269F). The CEO is required to assess whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C). If the application satisfies these criteria, the CEO must issue a written order, the TCO, specifying the applicable prescribed item of the Customs Tariff Act 1995 (section 269P(3)). This specific TCO, No. 1048997, pertains to certain parts for a furnace tending assembly and declares these parts to be subject to item 50 of Schedule 4 of the Tariff, with a duty rate of free, down from the general rate of 5%.
The Act imposes certain obligations on the parties involved, notably on the CEO and applicants. The CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to submit a response (subsection 269K(1)). Additionally, the CEO must ensure that the application meets the core criteria before issuing a TCO. In this case, the CEO did not receive any submissions challenging the TCO application. The applicant, in this instance Boyne Smelters Ltd, must provide sufficient information to demonstrate that the goods in question are not substitutable by Australian-produced goods.
Failure to comply with the provisions of the Customs Act 1901, particularly in the context of TCO applications, may result in legal consequences. Although the explanatory statement does not detail specific offences or penalties, the Act generally provides for enforcement actions, which could include civil or criminal penalties. The maximum penalties for breaches of customs regulations are set out in other parts of the Act and could potentially include fines and imprisonment. For instance, under section 236 of the Customs Act, the penalties for offences related to false statements or fraudulent conduct can be substantial, reflecting the seriousness with which the Act treats non-compliance. The TCO itself does not impose any new liabilities on persons other than the Commonwealth and does not affect rights as at the date of registration.