EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505969
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.
Barrick Australia Limited applied for a TCO in respect of certain Crushers on 20 May 2005.
Instrument
TCO No 0505969 was made on 21 October 2005. It declares that those certain Crushers 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. 0505969 is taken to have come into force on 20 May 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 Tariff Concession Instrument No. 0505969, enacted in 2005, is an instrument made under the Customs Act 1901 with the purpose of providing tariff concessions for specific goods. This instrument was introduced to address the need for a streamlined process in granting tariff concessions, allowing the Chief Executive Officer of Customs to effectively manage applications and implement concessions where appropriate. The instrument was enacted by the relevant authority within the Australian government and aims to facilitate the reduction of customs duties on certain imported goods, thereby encouraging trade and investment.
The process under the Customs Act allows for the application of tariff concessions to goods where certain criteria are met, specifically where no substitutable goods are produced in Australia. In this instance, the instrument was applied to Crushers, resulting in a reduction of the duty rate from 5% to 0%. The enactment and operation of this instrument are designed to support economic objectives by making imported goods more competitive and accessible, without imposing additional burdens or liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) under Part XVA, allows for the application of lower rates of customs duty on certain goods, provided no substitutable goods are produced in Australia in the ordinary course of business. This legislation applies to any person who applies for a TCO in respect of goods, and it is subject to the decision of the Chief Executive Officer of Customs (CEO). The geographic reach of this Act is national, as it applies across Australia under the Commonwealth. Exclusions include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, though the primary focus remains on ensuring that the application of tariff concessions does not disadvantage Australian production. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the date the TCO is deemed to come into force, without any new liabilities being imposed on them.
Key Provisions
The Customs Act 1901, as amended, facilitates the granting of Tariff Concession Orders (TCOs) under section 269F, whereby the Chief Executive Officer of Customs (CEO) can apply a reduced rate of customs duty on specified goods. Section 269C sets the core criteria for an application to be considered for a TCO, specifically requiring that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods, as defined by section 269D, refer to goods produced in Australia that serve the same use as the goods in question. If the CEO is satisfied that these criteria are met, they must issue a written TCO, as stipulated in section 269P(3). In the case of TCO No. 0505969, the CEO approved the application from Barrick Australia Limited for certain Crushers, applying a 0% duty rate on these goods, which contrasts with the general 5% rate.
The obligations imposed by the Customs Act on parties applying for a TCO include ensuring that their application meets the specified core criteria and providing sufficient evidence that no substitutable goods are produced in Australia. The CEO has an obligation to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit their reasons for or against the concession, as per subsection 269K(1). In this instance, no submissions were received in response to the published notice for TCO No. 0505969. The TCO itself imposes no liabilities on any person and does not affect the rights of persons other than the Commonwealth regarding actions taken before the registration date.
Under the Customs Act, failure to comply with the requirements for a TCO, or misuse of a granted TCO, could lead to civil or criminal penalties. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can result in substantial fines and, in severe cases, imprisonment. The Act empowers the CEO to enforce compliance, including the potential for legal action against those who fail to adhere to the conditions of a TCO or who fraudulently claim concessions. The potential penalties underscore the importance of accurate application and adherence to the stipulations of the TCOs and the overall customs duty framework.