EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507061
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.
Bootu Creek Resources Pty Ltd applied for a TCO in respect of certain Dense Media Separation Plant on 9 June 2005.
Instrument
TCO No 0507061 was made on 21 October 2005. It declares that those certain Dense Media Separation 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. 0507061 is taken to have come into force on 9 June 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 was enacted to provide a framework for the administration of customs duties and other charges on imported and exported goods. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) to provide tariff relief on certain goods, and this is intended to facilitate trade and economic efficiency by reducing costs for importers of specific goods. The instrument F2005L03294, or Tariff Concession Instrument No. 0507061, was introduced by the Chief Executive Officer of Customs following an application from Bootu Creek Resources Pty Ltd for a TCO on certain Dense Media Separation Plant. The instrument was enacted to address the issue of tariff relief for goods that have no substitutable domestic alternatives. This particular TCO, effective from 9 June 2005, reduces the customs duty rate from 5% to 0% on the specified plant, thereby enhancing the competitiveness of these goods in the Australian market without imposing any additional liabilities on importers or other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0507061, made under Part XVA of the Customs Act 1901, applies to individuals or entities seeking a reduction in customs duty for certain specified goods. Specifically, the instrument concerns a Tariff Concession Order (TCO) applied for by Bootu Creek Resources Pty Ltd for Dense Media Separation Plant, where the goods are subject to a concessionary rate of customs duty upon import. The Act applies to these goods, and the concessions are granted if no substitutable goods are produced in Australia in the ordinary course of business, as stipulated in section 269C of the Act. The instrument's jurisdictional reach is Commonwealth-wide, and it is applicable to the entire nation of Australia. The TCO does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person's rights as at the date of registration. Additionally, the instrument extends its application through subordinate instruments as necessary to provide further detail on the specific goods eligible for the concession and the process for applying for such concessions.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0507061, pertain to the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) under section 269F. 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. Section 269P(3) provides that if the CEO is satisfied the application meets these core criteria, a TCO must be made. This particular instrument, TCO No. 0507061, made on 21 October 2005, declares that certain Dense Media Separation Plant are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a rate of duty of 0%, down from the general rate of 5%.
The Customs Act 1901 imposes several obligations on the parties involved. The CEO must assess applications for TCOs to determine if they meet the core criteria (section 269C). If the CEO decides to proceed, a written TCO must be issued (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from interested parties once an application is deemed valid (subsection 269K(1)). Furthermore, section 269S(1) establishes that a TCO comes into force on the date the application is lodged. The CEO in this instance did not receive any submissions in response to the Gazette notice for TCO No. 0507061.
Any breach of the requirements under the Customs Act 1901 could lead to various civil or criminal consequences. The Act does not explicitly outline specific offences, penalties, or civil consequences for breaches directly related to TCOs. However, general provisions within the Act and associated regulations may apply to ensure compliance. For instance, subsection 269K(1) requires the CEO to publish a notice in the Gazette and invites submissions from interested parties; failure to follow this requirement could result in procedural errors. In broader terms, any misuse or fraud related to customs duties could attract penalties under sections 236D and 236E, which may include fines up to 10,000 penalty units or imprisonment for up to 10 years, or both, depending on the severity of the offence.