EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100462
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 furnance gas stack parts on 04 January 2011.
Instrument
TCO No 1100462 was made on 28 March 2011. It declares that those certain submerged arc furnance gas stack parts 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. 1100462 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 Tariff Concession Instrument No. 1100462, enacted in 2011 under the Customs Act 1901, addresses the issue of ensuring that Australian businesses can access certain imported goods at a reduced customs duty rate, provided no substitutable goods are produced in Australia. The instrument was developed in response to an application by Simcoa Operations Pty Ltd for tariff concessions on specific submerged arc furnace gas stack parts. The primary objective of this legislation, as overseen by the Chief Executive Officer of Customs, is to facilitate the import of goods that are not produced domestically, thereby supporting Australian industries by allowing them to obtain necessary materials at a lower cost. The Tariff Concession Order (TCO) ensures that the importation of these specific parts is duty-free, effective from the date the application was lodged. This approach aims to enhance the competitiveness of Australian businesses while ensuring compliance with the core criteria established by the Customs Act 1901.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) mechanism, allows the Chief Executive Officer of Customs to reduce the customs duty on specific goods when certain conditions are met. This process applies to individuals or entities seeking to import goods that are not currently produced in Australia and for which there are no substitutable goods domestically available. The application of the TCO is contingent on the CEO confirming that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from tariff concession eligibility. Once a TCO is issued, it applies retroactively to the date of the application, meaning that importers can seek duty refunds for goods imported since that date, thereby benefiting from the lower duty rates. The legislation ensures that the rights of existing parties are not adversely affected, nor are new liabilities imposed on them as a result of the TCO.
The scope of the Act is national, with its provisions and the issuance of TCOs extending across Australia, governed by the Commonwealth. The Act does not specify exclusions beyond those mentioned in section 269SJ, and its application can be further refined through subordinate instruments such as regulations, which may provide additional detail or conditions for specific industries or types of goods. However, the primary focus remains on ensuring that the importation of non-domestically produced goods that are not substitutable by Australian-made alternatives can benefit from tariff reductions, thereby supporting trade and potentially encouraging the importation of niche or specialised goods.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which establish the criteria for the approval of Tariff Concession Orders (TCOs) and the process for their implementation. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, while section 269C outlines the core criteria that must be satisfied for such an application to be approved, particularly focusing on the non-production of substitutable goods in Australia. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written order declaring the goods subject to the TCO and applying the specified duty rate from Schedule 4 of the Customs Tariff Act 1995.
The Customs Act 1901 imposes specific obligations on both the CEO and applicants for TCOs. For the CEO, it is mandatory to assess applications against the core criteria set out in section 269C and to make a written order if the criteria are met. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as required by section 269K(1), although no submissions were received in this case. For applicants, such as Simcoa Operations Pty Ltd, the obligation is to ensure their applications meet the core criteria and to provide any necessary information to substantiate their claims. The CEO must then decide whether to grant the TCO based on the provided information.
Breaches of the provisions outlined in the Customs Act 1901 can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences, the Act generally includes provisions for penalties associated with non-compliance with customs regulations. For instance, misleading statements or fraudulent applications could potentially result in fines or other penalties as prescribed under the Act or related legislation. The specific penalties would depend on the nature and severity of the breach, but they may include substantial fines or, in severe cases, criminal charges.
The Tariff Concession Order No. 1100462, effective from 4 January 2011, benefits importers by allowing them to import certain submerged arc furnace gas stack parts duty-free, as the general rate of duty for these goods is 5% but is set to free under the TCO. This order does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, ensuring that no existing rights or obligations are adversely affected by the TCO. Importers can also apply for a refund of duty on goods imported since the effective date of the TCO, as per the Customs Regulations.