EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108392
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.
Nyrstar Port Pirie Pty Ltd applied for a TCO in respect of certain electrolysis machine parts on 7 March 2011.
Instrument
TCO No 1108392 was made on 30 May 2011. It declares that those certain electrolysis machine 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. 1108392 is taken to have come into force on 7 March 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 administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These TCOs are designed to reduce customs duties on specific goods, provided they meet certain criteria, thereby encouraging trade and supporting Australian industries by making imported goods more competitive. The Act was updated to facilitate such concessions, addressing a gap in the ability to provide tariff relief on specific goods that are not produced domestically or do not have substitutable alternatives in Australia. Instrument No. 1108392, made under the authority of the Customs Act, specifically addresses an application by Nyrstar Port Pirie Pty Ltd for a tariff concession on certain electrolysis machine parts. The instrument was published in the Gazette, inviting any interested party to object, but no objections were received. Consequently, the concession was granted, and the tariff on these parts was set to free, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a scheme whereby Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. This Act applies to individuals or entities seeking to import specific goods that meet certain criteria, ensuring that no substitutable goods are produced in Australia. The CEO must be satisfied that the application does not involve goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. Once the core criteria are met, a TCO is issued, applying a prescribed duty rate specified in the Customs Tariff Act 1995. The scope of the Act is national, affecting all importers of goods within the Australian jurisdiction, and it does not disadvantage existing rights or impose new liabilities on any person other than the Commonwealth. The TCO No. 1108392, which was issued on 30 May 2011, exempts certain electrolysis machine parts from the general 5% duty, making them duty-free, effective from 7 March 2011.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1108392 involve the granting of tariff concessions on specific goods under the Customs Act 1901. Section 269F allows 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 is valid and meets the criteria set out in sections 269C, 269B, and 269D, the CEO must make a written order declaring the goods eligible for a concession. In this case, section 269P(3) was used to make TCO No. 1108392, which applies to certain electrolysis machine parts. These parts now have a rate of duty of free, down from the general rate of 5%, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person may apply for a TCO under section 269F, but the CEO must ensure the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also assess whether the application meets the core criteria, as outlined in section 269C. If satisfied, the CEO must make a written order as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as required by subsection 269K(1). In this instance, the CEO did not receive any submissions, allowing the TCO to proceed.
Any breaches of the provisions under the Customs Act 1901 can lead to civil and criminal consequences. While the explanatory statement does not specify penalties for non-compliance with TCO regulations, general provisions under the Customs Act may apply. Violations of customs regulations can result in both civil penalties, such as fines, and criminal penalties, including imprisonment, depending on the severity of the breach. The exact penalties would be determined based on the specific circumstances of the violation and the relevant sections of the Customs Act.
In summary, the Tariff Concession Instrument No. 1108392 grants a tariff concession on certain electrolysis machine parts, reducing the duty rate from 5% to free. The process involves an application to the CEO, assessment against specified criteria, and publication in the Gazette for any submissions. The TCO does not impose any liabilities on persons other than the Commonwealth and allows importers to apply for a refund of duty on goods imported since the TCO's effective date. Breaches of the Act's provisions can result in civil and criminal penalties, although the specifics are not detailed in the explanatory statement.