EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101016
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 cables on 10 January 2011.
Instrument
TCO No 1101016 was made on 04 April 2011. It declares that those certain submerged arc furnace cables 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. 1101016 is taken to have come into force on 10 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 Australian Parliament, provides a framework for the regulation of customs and excise in Australia. The Act was designed to establish a comprehensive system for the collection of customs duties and to facilitate international trade. Specifically, Part XVA of the Customs Act 1901 establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on goods that meet specific criteria, thus addressing the gap in tariff concessions for certain imported goods. The policy objective of this legislative provision is to encourage the importation of goods that are not produced domestically by offering tariff relief, thereby supporting trade and economic activity. The Tariff Concession Instrument No. 1101016, made under this framework, granted a tariff concession to Simcoa Operations Pty Ltd for submerged arc furnace cables, reflecting the application of this scheme in practice.
Scope and Application
The Tariff Concession Instrument No. 1101016 is an instrument under the Customs Act 1901, which governs the application of Tariff Concession Orders (TCOs) for certain goods. Specifically, this instrument applies to submerged arc furnace cables and provides for a concession in customs duty for these goods, setting the duty rate to free, as opposed to the general rate of 5%. The instrument is applicable to entities involved in the importation of these cables, thereby directly affecting the financial obligations of importers who are subject to the concessions outlined. The scope of the legislation extends to the Commonwealth jurisdiction and impacts the conduct related to the importation of specified goods, ensuring compliance with the terms of the TCO. The application of the Act is restricted to goods that are not specified in section 269SJ of the Customs Act 1901, which excludes certain types of goods from being eligible for tariff concessions. The commencement of the TCO aligns with the date the application was lodged, in this case, 10 January 2011, ensuring that the rights and obligations of the parties are determined from that date. The TCO does not retroactively affect the rights of any person, providing certainty and protection for those who may have already imported the goods before the concession was applied.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). A TCO allows for a lower rate of customs duty to be applied to certain goods (s 269F). Any individual or entity may apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO (s 269SJ). For an application to be considered, the CEO must determine whether it meets the core criteria established by section 269C. This requires that, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. If the CEO finds that the application meets these criteria, they must issue a written order, which constitutes a TCO, specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
The obligations under this legislation involve ensuring that applications for TCOs are processed in accordance with the outlined criteria. This includes the CEO's responsibility to publish a notice in the Gazette inviting any objections to the proposed TCO, thereby allowing for public consultation (s 269K(1)). In the case of TCO No 1101016, the CEO did not receive any submissions opposing the concession, indicating that the application met the required criteria. Moreover, the TCO applies retroactively to the date of application, meaning that importers can apply for a refund of duties paid on these goods since the date the TCO was deemed to have come into force (s 269S(1), Reg 126(1)(r)). Importantly, the TCO does not impose any new liabilities or disadvantage any person's existing rights, ensuring that the rights of importers are positively affected.
Any breach of the provisions outlined in the Customs Act 1901, including the submission of false information in an application for a TCO, could lead to significant legal consequences. While the explanatory statement does not detail specific penalties, it is reasonable to infer that penalties could include fines and other sanctions under the Customs Act and related legislation. The exact penalties would be determined based on the severity of the breach, and in the case of criminal offences, maximum penalties could be prescribed under the relevant sections of the Act or other applicable laws. The Act also provides for civil remedies, including compensation for any loss or damage caused by non-compliance. It is crucial for applicants and entities subject to the TCO to adhere to the requirements to avoid these consequences.