EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126049
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 anode parts on 03 August 2011.
Instrument
TCO No 1126049 was made on 28 October 2011. It declares that those certain anode 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. 1126049 is taken to have come into force on 03 August 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 Parliament of Australia, establishes a framework for the regulation of customs and border control, including the imposition of customs duties. It was introduced to address the need for a structured approach to the regulation of imports and exports, ensuring that the importation of goods is managed in a way that supports economic policy and revenue collection. Tariff Concession Instrument No. 1126049 was created to provide specific relief from customs duties for certain goods, addressing a gap where such goods would otherwise incur duties. The policy objective is to ensure that when no substitutable goods are produced in Australia, importers of the specified goods are not burdened with customs duties, thereby facilitating the importation of these goods in a manner that aligns with broader economic strategies.
Scope and Application
The Tariff Concession Instrument No. 1126049 is a specific measure under Part XVA of the Customs Act 1901, designed to provide relief on customs duties for certain goods. The Act applies to individuals and entities, such as Boyne Smelters Ltd, who apply for tariff concessions on goods that are not substitutable and not produced in Australia. This concession effectively lowers the customs duty on these specified goods to zero, from the general rate of 5% as stipulated in Schedule 4 of the Customs Tariff Act 1995. The legislation's application is governed by the jurisdictional reach of the Commonwealth, and it is subject to the criteria set out in sections 269C, 269D, and 269E of the Customs Act 1901. Exclusions apply to goods listed in section 269SJ, which cannot be subject to a tariff concession order. The TCO does not impose any retroactive liabilities or affect rights adversely as it applies prospectively from the date the application was lodged. The Chief Executive Officer of Customs has the authority to make such orders and can extend or restrict their application through subordinate instruments.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 1126049, are sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269C outlines the core criteria for a Tariff Concession Order (TCO), requiring that no substitutable goods are produced in Australia on the day the application is lodged. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO, while section 269P mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be made. Section 269S specifies the commencement date of the TCO, which is the same as the date the application was lodged.
The Act imposes specific obligations on the CEO of Customs, including the responsibility to assess whether an application for a TCO meets the core criteria (section 269C). If satisfied, the CEO must issue a written TCO (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). The Act also places obligations on applicants, requiring them to ensure their application is made in respect of goods not specified in section 269SJ and to provide sufficient information to demonstrate that no substitutable goods are produced in Australia.
Breaches of the requirements outlined in this legislation can lead to civil or criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, general provisions within the Customs Act 1901 may apply. For instance, providing false or misleading information in an application could lead to civil penalties under section 283B, including fines of up to $22,200 for individuals and $111,000 for bodies corporate. Additionally, serious breaches involving deliberate contraventions could result in criminal penalties, including fines and imprisonment, as outlined in the Crimes Act 1914. The exact penalties would depend on the specific nature and severity of the breach.