EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504709
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.
Ravensthorpe Nickel Operations Pty Ltd applied for a TCO in respect of certain Sulphuric Acid Production Plant on 26 April 2005.
Instrument
TCO No 0504709 was made on 23 September 2005. It declares that those certain Sulphuric Acid Production Plant 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 0%.
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. 0504709 is taken to have come into force on 26 April 2005.
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 administration of customs duties and provides the legal basis for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument was introduced to address the need for tariff relief on certain imported goods where no substitutable goods are produced in Australia, thus ensuring that Australian industries are not unfairly disadvantaged by the availability of cheaper imported alternatives. The specific objective of Tariff Concession Instrument No. 0504709, enacted in 2005, was to provide tariff concessions on certain Sulphuric Acid Production Plant, reducing the customs duty from 5% to 0% to support the competitiveness of Ravensthorpe Nickel Operations Pty Ltd in the Australian market. This measure was taken following an application by the company and after consultation with interested parties, which in this case, did not result in any submissions opposing the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which can reduce the customs duty on certain goods. The Act applies to any person or entity that wishes to apply for a TCO for goods that are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. This includes industries that rely on importing specific machinery or components that are not produced domestically and can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it is a Commonwealth Act, and applies across Australia. However, the Act does not extend its application to goods listed in section 269SJ. The application of the Act may be further refined or expanded through subordinate instruments, such as regulations or orders made under the authority of the Act. The explanatory statement for Instrument No. 0504709 illustrates this process, detailing a specific case where a TCO was granted for certain Sulphuric Acid Production Plant, effectively reducing the duty on these goods from 5% to 0%.
Key Provisions
The Customs Act 1901 (the Act) includes provisions in Part XVA that allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) (sections 269F, 269C, and 269P(3)). A TCO allows for a lower rate of customs duty on specified goods, provided certain criteria are met. An applicant may submit a TCO application if the goods in question are not listed in section 269SJ of the Act, which specifies those goods that cannot be subject to a TCO. The CEO must then assess if the application meets the core criteria, specifically whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C).
The Act imposes several obligations on parties or entities it governs. Firstly, applicants must ensure that their TCO applications are for goods not listed in section 269SJ of the Act. They must also demonstrate that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO (subsection 269K(1)). The CEO must then decide whether to issue the TCO based on the application and any submissions received.
Breaches of the Act or its regulations can result in both civil and criminal consequences. For instance, section 126 of the Customs Act outlines various offences, including the making of false statements or the provision of misleading information in connection with an application for a TCO. Such offences can lead to penalties, including fines of up to $22,200 for individuals and up to $111,000 for corporations, as stipulated in section 285 of the Act. Additionally, there may be civil consequences for non-compliance, such as the imposition of additional duties or interest on the goods in question. These provisions ensure that the scheme operates fairly and effectively, protecting both the interests of the Commonwealth and those of the applicants and other stakeholders.