EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510272
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.
Rio Tinto Coal Australia Pty Limited applied for a TCO in respect of certain coal handling and preparation plant on 04 August 2005.
Instrument
TCO No 0510272 was made on 23 January 2006. It declares that those certain coal handling and preparation plants 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. 0510272 is taken to have come into force on 04 August 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. 0510272 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on specific imported goods, in this case, coal handling and preparation plants. This instrument was developed in response to an application by Rio Tinto Coal Australia Pty Limited, aiming to provide tariff relief by setting the duty rate for these goods at zero, thereby facilitating the importation of these specific industrial assets without incurring the otherwise applicable 5% customs duty. The instrument was created by the Chief Executive Officer of Customs, as mandated by the Act, after ensuring that no substitutable goods were produced in Australia. The process involved public consultation, although no submissions were received against the concession. The tariff concession is effective from the date the application was lodged, providing immediate benefits to importers by potentially allowing them to apply for duty refunds on goods imported since that date.
Scope and Application
The Tariff Concession Instrument No. 0510272 applies specifically to certain coal handling and preparation plants, as requested by Rio Tinto Coal Australia Pty Limited, and is made under the authority of the Customs Act 1901. This Act governs the imposition and concession of customs duties on goods imported into Australia. The Instrument applies to the entities directly involved in the importation of these specific goods and the broader industry that might benefit from reduced duty rates on such imports. The geographic reach of this Act and its instruments is national, as it pertains to the entire Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which are explicitly excluded from tariff concession orders. The application of the Act can be extended or restricted through subordinate instruments, although in this case, no such modifications have been noted. The Instrument itself came into effect on 4 August 2005, the date on which the application was lodged, and it does not affect the rights of any person in relation to actions taken prior to its registration.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0510272, under the Customs Act 1901, include sections 269C, 269B, 269D, 269E, 269F, and 269P, among others. These sections outline the process for applying for and granting a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application meets the core criteria, as defined in section 269C, the CEO must issue a written order (TCO) that applies a lower rate of customs duty to the specified goods. This is contingent upon the CEO being satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C.
The obligations and requirements imposed by this legislation on parties or entities include the necessity for a TCO applicant to demonstrate that the goods in question are not substitutable by any goods produced in Australia. The CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). The CEO must also ensure that the application meets the core criteria before issuing a TCO. Additionally, the Act requires that the TCO not adversely affect the rights of any person, other than the Commonwealth, as of the date of registration, ensuring that no liabilities are imposed retroactively.
Offences or breaches of this legislation can result in civil or criminal consequences, although specific offences and penalties are not detailed in the explanatory statement. The Act does not impose penalties directly within the explanatory statement, but violations of the Customs Act 1901 or associated regulations could lead to fines, imprisonment, or other legal repercussions depending on the severity of the breach. The maximum penalties would be determined by the relevant sections of the primary Act and any subsidiary legislation.
The Tariff Concession Instrument No. 0510272 does not specify explicit penalties for breaches within its text. However, general provisions within the Customs Act 1901 and associated regulations provide the framework for potential penalties. For instance, section 269S(1) of the Act dictates that the TCO is effective from the date the application was lodged, and failure to comply with the terms of a TCO could result in legal action under the broader Customs Act provisions. The CEO retains the authority to enforce compliance and take appropriate action against any non-compliance, which may include pursuing civil or criminal penalties as outlined in the overarching legislation.