EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1104810
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 applied for a TCO in respect of certain submerged arc furnace charging system parts on 02 February 2011.
Instrument
TCO No 1104810 was made on 28 April 2011. It declares that those certain submerged arc furnace charging system 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. 1104810 is taken to have come into force on 02 February 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 was enacted by the Commonwealth Parliament to establish a regulatory framework governing customs and excise duties in Australia. This Act provides the basis for the introduction of Tariff Concession Orders (TCOs) under Part XVA, which aim to address the economic disadvantage faced by Australian businesses when competing against imported goods by granting tariff concessions on specific imported goods. Tariff Concession Instrument No. 1104810, made on 28 April 2011, is an example of this mechanism in action, as it grants tariff concessions for certain submerged arc furnace charging system parts. The policy objective behind this TCO is to alleviate the competitive disadvantage faced by Australian producers by providing tariff relief, thereby encouraging the growth and competitiveness of domestic industries. The instrument was introduced without any submissions against it, indicating broad acceptance of its necessity and alignment with the legislative intent to foster economic growth through targeted tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 1104810, made under the Customs Act 1901, applies to specific submerged arc furnace charging system parts for which Simcoa Operations applied for a Tariff Concession Order (TCO). The Act facilitates the application of lower customs duty rates on goods through the issuance of TCOs by the Chief Executive Officer of Customs, provided that the goods in question are not substitutable and are not produced in Australia in the ordinary course of business. This instrument is effective on the date the application was lodged, 2 February 2011, and it provides for a zero rate of duty on the specified goods, as opposed to the general rate of 5%. The application of this concession does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person with existing rights at the date of registration. The instrument's scope is limited to the specified goods and the entities involved in their importation, and it extends nationally in accordance with the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1104810 (the Instrument) under the Customs Act 1901 establish the framework for tariff concessions on specified goods. Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order that specifies the goods to which the concession applies (section 269P(3)). This Instrument, TCO No. 1104810, made on 28 April 2011, applies to certain submerged arc furnace charging system parts, declaring them to be subject to a zero rate of customs duty under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved in the process of applying for and granting a TCO. Firstly, any person seeking a TCO must ensure that their application is not in respect of goods specified in section 269SJ, which are ineligible for concessions. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO must then decide whether the application meets the core criteria of section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the criteria are met, the CEO must issue a TCO as specified.
The Instrument also specifies the consequences of a breach of the Act's provisions or the terms of a TCO. While the Act does not explicitly detail offences, penalties, or civil/criminal consequences for breach of a TCO, breaches of the Customs Act 1901 in general may lead to a range of penalties. For instance, penalties for incorrect declarations or fraudulent activities can be severe, including substantial fines and potential imprisonment. The exact penalties would depend on the specific nature and severity of the breach, but they can include fines of up to $22,200 for individuals and significantly higher amounts for corporations, alongside potential criminal charges and imprisonment for serious offences.