EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1049412
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 seals for electrodes used in electric arc furnaces on 05 November 2010.
Instrument
TCO No 1049412 was made on 31 January 2011. It declares that those certain seals for electrodes used in electric 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. 1049412 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. 1049412, enacted in 2011, is a part of the Customs Act 1901, which facilitates tariff concessions for specific goods through the creation of Tariff Concession Orders (TCOs). The Act was introduced to address the need for a mechanism that allows for the reduction of customs duties on certain imported goods under specific conditions, thereby promoting trade efficiency and economic benefits. The instrument was enacted by the Chief Executive Officer of Customs (CEO) in response to an application by Simcoa Operations Pty Ltd for tariff concessions on certain seals for electrodes used in electric arc furnaces. The CEO determined that these goods were not substitutable by Australian-produced alternatives, thereby satisfying the core criteria for a TCO. This legislative measure aims to ensure that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the TCO came into effect, without imposing any liabilities on other parties.
Scope and Application
The Tariff Concession Instrument No. 1049412 applies to the concession of customs duty on certain seals for electrodes used in electric arc furnaces, as determined by the Chief Executive Officer of Customs under the Customs Act 1901. This instrument specifically pertains to goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in the Act. The application of this Instrument extends across the Commonwealth of Australia, impacting any individual or entity involved in the importation of these specified seals. The Instrument’s scope is limited to the goods detailed in the application submitted by Simcoa Operations Pty Ltd, which was accepted on 5 November 2010. The instrument came into force on the same date, and it does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on anyone. It is noteworthy that the Instrument was published in the Gazette with an invitation for submissions, though none were received. This Instrument is subject to further regulations and potential extensions through subordinate instruments, though these are not detailed in the explanatory statement.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1049412 (TCO No. 1049412) pertain to the Customs Act 1901 (section 269F) and the Customs Tariff Act 1995. Section 269F of the Customs Act 1901 allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. If the CEO determines that the application complies with the core criteria outlined in section 269C and that no substitutable goods are produced in Australia (section 269P(3)), a TCO is issued. TCO No. 1049412, declared on 31 January 2011, applies a zero-rate duty to certain seals for electrodes used in electric arc furnaces, previously subject to a 5% duty rate.
The Customs Act 1901 imposes several obligations on the parties involved. Firstly, it mandates that the CEO must ensure the application for a TCO does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who might have reasons why the TCO should not be made, as stipulated in section 269K(1). Additionally, the Act specifies that the TCO does not affect the rights of any person, other than the Commonwealth, concerning actions taken before the TCO's effective date. This means that the TCO does not retroactively impose liabilities or disadvantage anyone except the Commonwealth.
The Act also outlines potential offences and consequences for breaches. While the explanatory statement does not specify offences directly related to the TCO application process, general provisions of the Customs Act 1901 would apply to any violations. These may include civil or criminal penalties for non-compliance with customs duties and other regulations. The exact penalties would depend on the nature and severity of the breach, but they can range from fines to imprisonment, depending on the specific contraventions of the Customs Act 1901. The explanatory statement does not provide maximum penalties for the TCO itself, but they would be consistent with the broader legislative framework.