EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114141
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.
Boyne Smelters Ltd applied for a TCO in respect of certain relief valves on 04 May 2011.
Instrument
TCO No 1114141 was made on 01 August 2011. It declares that those certain relief valves 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. 1114141 is taken to have come into force on 04 May 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 through a system of tariff concessions. This legislation was introduced to facilitate the importation of goods by offering reduced customs duty rates under certain conditions. Specifically, the Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet particular criteria, such as the absence of substitutable goods produced in Australia. The policy objective of this Act is to promote economic efficiency and competitiveness by allowing for the duty-free importation of specific goods, thereby supporting Australian industries that cannot produce these goods domestically. The explanatory statement for Tariff Concession Instrument No. 1114141 issued under the Act illustrates this by detailing the process and conditions for granting a TCO to Boyne Smelters Ltd for certain relief valves, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person who can apply for a TCO concerning goods that are not explicitly excluded under section 269SJ of the Act. For an application to be considered, the applicant must demonstrate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as per sections 269C and 269D of the Act. The geographic reach of this legislation is national, impacting all importers and exporters within Australia. Once a TCO is issued, it applies to the goods specified from the date the application was lodged, as outlined in subsection 269S(1) of the Act. In the case of Boyne Smelters Ltd, a TCO was issued on 1 August 2011, granting tariff concessions on certain relief valves from the date of application, 4 May 2011. This TCO does not affect any pre-existing rights or impose new liabilities on individuals other than the Commonwealth.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1114141 under the Customs Act 1901 (section 269F) allow for the application for a Tariff Concession Order (TCO) by any person to the Chief Executive Officer of Customs (section 269C). If the application is not for goods specified in section 269SJ and meets the core criteria of section 269C, the CEO is required to make a written TCO (section 269P(3)). This instrument declares that certain relief valves are subject to a 50% rate of duty under Schedule 4 of the Customs Tariff Act 1995, which is reduced to free under the TCO. The TCO is effective from the date the application was lodged (section 269S(1)) and does not disadvantage any person or impose liabilities in respect of anything done or omitted before the date of registration (subsection 269S(1)).
The obligations imposed by the Act on the parties it governs include ensuring that any application for a TCO is not for goods specified in section 269SJ and that the application meets the core criteria set out in section 269C. Specifically, the CEO must publish a notice in the Gazette inviting submissions from any person who may object to the TCO (subsection 269K(1)). Additionally, Boyne Smelters Ltd, as the applicant, must ensure that their application is valid and that the goods specified do not have substitutable equivalents produced in Australia. The CEO, upon receiving a valid application, must make a TCO if the core criteria are satisfied.
Breach of the provisions of the Customs Act 1901 or the Tariff Concession Instrument No. 1114141 can lead to various civil or criminal consequences. While the Explanatory Statement does not specify maximum penalties for breaches of the TCO itself, breaches of the Customs Act 1901 can result in significant penalties. For instance, under section 254 of the Customs Act 1901, unauthorised importation of goods can result in fines and imprisonment, with the severity of the penalty depending on the value of the goods and the circumstances of the offence. Similarly, providing false or misleading information in an application for a TCO could lead to penalties under the general provisions of the Customs Act 1901, which may include fines and imprisonment.