EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1124640
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 stoking cars on 25 July 2011.
Instrument
TCO No 1124640 was made on 12 October 2011. It declares that those certain stoking cars 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. 1124640 is taken to have come into force on 25 July 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, governs the administration of customs and excise duties, aiming to regulate the importation and exportation of goods and ensure efficient border control. The Tariff Concession Instrument No. 1124640, issued under the Act in 2011, addresses the specific issue of tariff concessions for goods not produced domestically, thereby supporting economic efficiency and competitiveness. The explanatory statement for this instrument indicates that it was created in response to an application by Simcoa Operations Pty Ltd for tariff concessions on certain stoking cars, which would benefit from a lower rate of customs duty if no substitutable goods were produced in Australia. The instrument, which came into force on the date of the application, ensures that the concession does not adversely affect existing rights and provides an opportunity for duty refunds to importers, ultimately promoting a fairer and more streamlined customs process.
Scope and Application
The Tariff Concession Instrument No. 1124640 applies to the specific goods for which Simcoa Operations Pty Ltd applied, namely certain stoking cars, under the Customs Act 1901. This Act governs the application and implementation of tariff concessions in Australia. The instrument extends to the geographic jurisdiction of the Commonwealth and applies to the conduct of importing these specific goods into Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order (TCO). The application of the TCO is effective from the date the application was lodged, 25 July 2011, and it does not affect any existing rights or impose liabilities on persons other than the Commonwealth in relation to activities conducted prior to the registration of the TCO. Importers of these goods will benefit from this concession as they can apply for a refund of duty paid on these goods since the effective date of the TCO. The scope of the Act can be further extended or restricted through subordinate instruments, which may provide additional guidelines or criteria for the application of TCOs.
Key Provisions
The key operative sections of this legislation (F2012L00124) are sections 269C, 269F, and 269P(3) of the Customs Act 1901 (the Act), which establish the process for making Tariff Concession Orders (TCOs). Section 269F permits a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to 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.
The Act imposes specific obligations and requirements on the CEO when processing a TCO application. Firstly, the CEO must decide whether the application meets the core criteria, which involves determining if no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also ensure that the goods in question are not those specified in section 269SJ of the Act, which are ineligible for a TCO. Once these criteria are satisfied, the CEO is required to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made. In this instance, no submissions were received in response to the published notice.
The legislation outlines specific offences, penalties, or consequences for breaches of the Customs Act 1901. While the Explanatory Statement does not detail specific penalties for breaches related to TCOs, breaches of the Customs Act generally can lead to significant civil and criminal penalties. Under section 275 of the Act, a person who contravenes any provision of the Act, or any regulation made under the Act, is liable to a penalty of up to $10,000 for each contravention. For corporations, the maximum penalty can be significantly higher, reaching up to $500,000 for each contravention. Additionally, in cases where a breach is deemed to be a serious contravention, individuals can be sentenced to imprisonment for up to five years, and corporations can face fines of up to $210,000. These penalties reflect the seriousness with which the Australian Government treats breaches of customs regulations.