EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100247
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 submerged arc furnace, furnace charging system bins on 4 January 2011.
Instrument
TCO No 1100247 was made on 23 May 2011. It declares that those certain submerged arc furnace, furnace charging system bins 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. 1100247 is taken to have come into force on 4 January 2011.
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. 1100247 was enacted in 2011 under the Customs Act 1901, designed to address the need for tariff concessions on specific imported goods. This instrument was introduced to facilitate the application process for tariff concessions by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that do not have substitutable Australian-produced equivalents. The primary objective of this instrument is to provide relief from customs duties on imported goods that are not produced in Australia, thereby promoting trade and economic efficiency. The instrument was developed by the Commonwealth Government and came into effect on the date of the application, 4 January 2011, without retroactively affecting the rights or imposing liabilities on any person other than the Commonwealth. The instrument ensures that importers can benefit from the tariff concession by applying for duty refunds on goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 1100247, made under the Customs Act 1901, applies to the specific goods in question—submerged arc furnace, furnace charging system bins—and is targeted towards those entities involved in the importation of these goods. The application of this instrument is limited to the Commonwealth jurisdiction, as it pertains to the concessions on customs duties outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The instrument effectively provides a tariff concession by reducing the customs duty from the general rate of 5% to free, provided that no substitutable goods are produced in Australia. The instrument was made following an application by Simcoa Operations Pty Ltd, and after determining that the core criteria were met, including the absence of substitutable goods produced in Australia. The Tariff Concession Order came into effect on the date the application was lodged, 4 January 2011, and it does not disadvantage any person or impose liabilities on anyone for actions taken prior to its registration. This instrument highlights the Commonwealth's ability to extend tariff concessions through subordinate legislation, subject to the conditions and criteria specified in the primary Act.
Key Provisions
The main operative sections of the Customs Act 1901 that relate to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Section 269C states that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, a written order must be made declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations and requirements on the parties involved. The CEO must decide whether an application for a TCO meets the core criteria, which includes verifying that no substitutable goods were produced in Australia at the time of the application. If the CEO determines that the core criteria are met, they must issue a TCO. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes there are reasons why the TCO should not be made.
The Act outlines various consequences for breaches or non-compliance. While the explanatory statement does not detail specific offences or penalties for failing to comply with the TCO provisions, breaches of other sections of the Customs Act 1901 can result in civil and criminal penalties. For instance, under section 266 of the Act, a person who knowingly or recklessly contravenes certain provisions can be liable to a penalty of up to $22,200 for an individual and up to $111,000 for a body corporate, depending on the severity of the offence. These penalties reflect the seriousness with which the Act treats non-compliance with its provisions.