EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506118
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.
Newcrest Mining Ltd applied for a TCO in respect of certain Chutes on 23 May 2005.
Instrument
TCO No 0506118 was made on 21 October 2005. It declares that those certain Chutes 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. 0506118 is taken to have come into force on 23 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. 0506118, enacted in 2005 under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods, in this case, certain Chutes, by reducing the customs duty rate from 5% to 0%. This legislative instrument was introduced to facilitate smoother trade and reduce costs for businesses importing these particular goods. The instrument was enacted by the Australian Government, specifically through the Chief Executive Officer of Customs, following an application from Newcrest Mining Ltd. The primary policy objective behind this instrument is to ensure that Australian businesses can compete effectively in the global market by lowering the cost of importing certain goods that are not domestically produced.
The instrument was designed to comply with the existing framework set out in the Customs Act 1901, particularly under Part XVA, which allows for the creation of Tariff Concession Orders (TCOs). By declaring that certain Chutes are subject to a lower rate of customs duty, the legislation ensures that these goods are treated favourably in terms of import duties, provided they meet the criteria of not having substitutable goods produced in Australia. The instrument also ensures that the rights of importers are preserved and potentially beneficially affected, allowing them to apply for a refund of any duties paid prior to the commencement of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0506118, issued under the Customs Act 1901, applies to goods specified in the instrument, in this case certain Chutes, and the individuals or entities that import these goods. The Act allows for the Chief Executive Officer of Customs to grant tariff concessions on certain goods, thereby reducing the customs duty rate for those specific goods. This legislation applies on a national level within Australia, as it falls under the purview of the Commonwealth. The Act does not specify any exclusions or exemptions other than those detailed in section 269SJ of the Act, which lists goods that cannot be subject to a tariff concession order (TCO). The application of the TCO is effective from the date the application for the concession was lodged, in this case 23 May 2005. The scope of the TCO can be extended or modified through subordinate instruments, though this specific instrument does not impose any new liabilities and does not disadvantage any person other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0506118 are sections 269C, 269F, and 269P(3) of the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) regarding certain goods. If the CEO determines that the application complies with the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia on the day the application is lodged, the CEO must issue a TCO as outlined in section 269P(3). This order declares the goods in question as subject to a specific item in Schedule 4 of the Customs Tariff Act 1995, resulting in a reduced rate of duty.
The Act imposes several obligations and requirements on the parties it governs. The CEO must ensure that any TCO application is valid and does not concern goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties if they believe there are reasons why the TCO should not be granted. Once an application is accepted, the CEO must assess whether the application meets the core criteria, including confirming that no substitutable goods were produced in Australia. If the criteria are met, the CEO is mandated to issue a TCO.
Breach of the requirements or obligations outlined in the Customs Act 1901 can result in various penalties and consequences. While the explanatory statement does not specify the exact penalties for non-compliance, breaches of customs legislation generally attract significant fines and, in some cases, imprisonment. For instance, under section 284 of the Customs Act 1901, a person found guilty of an offence against the Act may be liable to a fine of up to $22,200 or imprisonment for up to two years, or both, for each offence. Additionally, incorrect or fraudulent applications for a TCO could lead to civil actions for damages or other legal repercussions.
The Tariff Concession Instrument No. 0506118, while providing tariff relief for certain Chutes, does not affect the rights of any person other than the Commonwealth as at the date of registration. It means that any pre-existing rights or liabilities remain unaffected. Importers stand to benefit from this order as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into force. Importantly, the TCO does not impose any new liabilities on any person, ensuring that the legal landscape remains stable for all parties involved.