EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111591
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.
Viridian applied for a TCO in respect of certain refractory blocks and/or shapes, tin bath, float furnace on 05 April 2011.
Instrument
TCO No 1111591 was made on 27 June 2011. It declares that those certain refractory blocks and/or shapes, tin bath, float furnace 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. 1111591 is taken to have come into force on 05 April 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 Commonwealth Parliament, provides the framework for the administration of customs and excise in Australia, including the ability to grant tariff concessions for specific goods through Tariff Concession Orders (TCOs). The primary issue addressed by the Act is the facilitation of trade by reducing customs duties on certain imported goods, provided they meet specific criteria and do not have Australian-made substitutes. The policy objective is to encourage the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials or products. In line with this, Tariff Concession Instrument No. 1111591 was enacted on 27 June 2011, applying a zero percent duty rate on certain refractory blocks and shapes, tin bath, and float furnace, effective from 5 April 2011, the date the application was lodged. This instrument was made following a successful application by Viridian, with no objections raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 1111591 under the Customs Act 1901 applies to specific goods such as refractory blocks and/or shapes, tin bath, and float furnace. The instrument was issued in response to an application by Viridian on 5 April 2011, and it became effective on the same date. The application for a Tariff Concession Order (TCO) was approved by the Chief Executive Officer of Customs (CEO) as it met the core criteria outlined in the Act, specifically that no substitutable goods were produced in Australia at the time of the application. This determination led to the reduction of the customs duty rate from the general rate of 5% to zero for the specified goods. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, although it does provide potential benefits to importers by enabling them to apply for a refund of duty on goods imported since the effective date of the TCO. The Act's provisions ensure that the CEO must consult with relevant parties by publishing a notice in the Gazette, although no submissions were received for this particular TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as evidenced by the Explanatory Statement for Tariff Concession Instrument No. 1111591, revolve around the procedure and criteria for making Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, and 269S). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, provided these goods are not specified in section 269SJ, which lists goods ineligible for a TCO. The CEO must ensure that the application meets the core criteria outlined in section 269C, specifically that no substitutable goods are produced in Australia on the day the application was lodged. If satisfied, the CEO must make a written order (TCO), as stipulated in section 269P(3), declaring the goods subject to the application are eligible for a tariff concession.
The Act imposes specific obligations on the CEO, including the requirement to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received, which indicates that the CEO was able to proceed with the order without opposition. The Act also mandates that a TCO comes into force on the day the application is lodged (subsection 269S(1)), ensuring that the concessions are retroactive to the application date. Furthermore, the rights of importers are positively affected as they can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
The legislation delineates consequences for breaches, although specific offences and penalties are not detailed in the explanatory statement. Generally, under the Customs Act 1901, breaches of the tariff concessions or misrepresentations in the application process could lead to civil or criminal penalties. These may include fines or imprisonment, depending on the severity of the breach. The exact penalties would be governed by the specific sections of the Act or associated regulations that are contravened. For instance, knowingly making false statements in the application process could be considered a criminal offence, potentially resulting in fines or imprisonment as stipulated in relevant sections of the Act. However, the explanatory statement does not provide explicit details on the maximum penalties or specific consequences for breaches in this context.