EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100391
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 gas stacks on 4 January 2011.
Instrument
TCO No 1100391 was made on 28 March 2011. It declares that those certain submerged arc furnace gas stacks 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. 1100391 is taken to have come into force on 04 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 Customs Act 1901, enacted by the Parliament of Australia, established a framework for the imposition of customs duty on imported goods. The Act included provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for the application of lower rates of customs duty on specific goods, provided certain criteria are met. Specifically, a TCO can be issued if no substitutable goods are produced in Australia in the ordinary course of business. The explanatory statement for Tariff Concession Instrument No. 1100391 clarifies the process and conditions under which TCOs are granted, ensuring that applications are evaluated based on the absence of substitutable goods within Australia. The Tariff Concession Order No. 1100391, issued on 28 March 2011, concerns certain submerged arc furnace gas stacks, reducing their duty rate from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The order came into effect on 4 January 2011, the date the application was lodged, and it does not affect the rights of any person prior to its registration.
Scope and Application
The Customs Act 1901, as amended and specifically under Part XVA, pertains to the procedure and conditions under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking a tariff concession for goods imported into Australia, provided that the goods do not fall under the categories specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The application process involves meeting core criteria, particularly ensuring that no substitutable goods are produced in Australia in the ordinary course of business. Once the application is accepted as valid and no objections are raised, the CEO is mandated to make a written order, thereby applying a concessional rate of duty on the specified goods, as exemplified by Tariff Concession Order No. 1100391 concerning submerged arc furnace gas stacks. This TCO, which came into force on the date of application, provides a zero-rate duty on the specified goods, thereby benefiting importers by potentially allowing them to claim refunds on duties paid before the TCO's effective date. The geographic reach of this Act is national, applying across Australia, and it extends its application through subordinate instruments such as the Customs Tariff Act 1995.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1100391, under the Customs Act 1901, provide that the Chief Executive Officer of Customs (CEO) may make a Tariff Concession Order (TCO) for certain goods if specific criteria are met. Under section 269F, an application for a TCO may be made if the goods in question do not fall within the scope of section 269SJ, which lists goods ineligible for a TCO. The core criteria for a TCO are outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If these criteria are satisfied, the CEO must make a written TCO, as per section 269P(3). This specific TCO No. 1100391 pertains to certain submerged arc furnace gas stacks, which now have a duty rate of free instead of the general rate of 5%.
The Act imposes certain obligations on the parties involved. For instance, the CEO is obligated to assess whether an application for a TCO meets the core criteria under section 269C and to make a written TCO if the criteria are met. The CEO must also 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. In this case, no submissions were received. Additionally, importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.
Breach of the provisions outlined in this legislation may result in various consequences. While the specific offences and penalties are not detailed in the explanatory statement, general provisions of the Customs Act 1901 and associated regulations could apply. For example, unauthorised importation of goods or fraudulent claims for tariff concessions may incur civil or criminal penalties. The maximum penalties for offences under the Customs Act can be severe, including substantial fines and imprisonment, depending on the nature and severity of the breach. Compliance with the Act and associated regulations is therefore crucial for all parties involved.