EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1049411
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 Pty Ltd applied for a TCO in respect of certain bustube systems for submerged arc furnaces on 05 November 2010.
Instrument
TCO No 1049411 was made on 31 January 2011. It declares that those certain bustube systems for submerged arc furnaces 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. 1049411 is taken to have come into force on 05 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 Tariff Concession Instrument No. 1049411 was enacted in 2011 under the Customs Act 1901 to address the specific needs of industries importing certain goods not produced domestically, thereby ensuring they are not unfairly burdened by customs duties. This instrument was introduced to facilitate the importation of specific bustube systems for submerged arc furnaces, which are critical for industrial processes but not manufactured within Australia. The Tariff Concession Order (TCO) was made in response to an application from Simcoa Operations Pty Ltd, following the procedure outlined in Part XVA of the Customs Act 1901, and was approved by the Chief Executive Officer of Customs after verifying that no substitutable goods were produced in Australia. The instrument aims to provide tariff relief, reducing the duty on these systems from the general rate of 5% to free, thereby supporting the operational efficiency and competitiveness of Australian industries reliant on such imports.
Scope and Application
The Tariff Concession Instrument No. 1049411, under the Customs Act 1901, applies to the concession of customs duty for certain bustube systems used in submerged arc furnaces. This concession applies to those who import these specific systems, providing them with a reduced duty rate, from zero as opposed to the general rate of 5%. The application of this Act extends to any person or entity involved in the importation of the specified goods, aiming to facilitate trade by reducing the financial burden on importers of these particular industrial components. The geographic reach of this Act is national, as it applies across Australia under the Commonwealth’s jurisdiction. The Act excludes certain goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. Furthermore, the Act allows for the extension or restriction of its application through subordinate instruments, enabling flexibility in its implementation and enforcement.
Key Provisions
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). The Act allows for lower rates of customs duty on goods subject to a TCO. A person can apply for a TCO, and if the CEO determines that the application is valid and meets the core criteria, they must make a written order declaring the goods eligible for a reduced duty rate (s 269C, 269P(3)). In this instance, TCO No 1049411 pertains to certain bustube systems for submerged arc furnaces, which are now subject to a free rate of duty instead of the general rate of 5% (s 269K(1)).
Under the Act, a TCO application is deemed to meet the core criteria if, on the day the application is lodged, there are no substitutable goods produced in Australia in the ordinary course of business (s 269C). For the purposes of this legislation, ‘substitutable goods’ means goods produced in Australia that could serve the same use or design purpose as the goods in question (s 269D, 269E). In the case of Simcoa Operations Pty Ltd's application, the CEO was satisfied that no such substitutable goods were produced in Australia, thus permitting the creation of TCO No 1049411.
The Act also mandates that the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be made. This ensures a level of transparency and opportunity for stakeholder input (s 269K(1)). In this case, the CEO did not receive any submissions opposing the TCO, thereby allowing it to proceed without impediment. Additionally, the TCO does not affect the rights of any person, except the Commonwealth, in terms of pre-existing rights or liabilities incurred before the TCO's registration date (s 269S(1)). Importers, however, will benefit from the ability to apply for a refund of duty on goods imported since the effective date of the TCO (Reg 126(1)(r)).
Any breach of the provisions set out in the Customs Act 1901 may result in civil or criminal penalties. For instance, the Act includes provisions for fines and imprisonment for offences such as providing false or misleading information in a TCO application, smuggling, or evading duty. The maximum penalties can vary significantly depending on the severity and nature of the offence, with serious cases potentially resulting in substantial fines and lengthy prison sentences. Compliance with the Act is crucial to avoid such legal repercussions.