EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510476
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.
Blue Circle Southern Cement Ltd applied for a TCO in respect of certain Mixing and Batching Line on 8 August 2005.
Instrument
TCO No 0510476 was made on 21 October 2005. It declares that those certain Mixing and Batching Line 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. 0510476 is taken to have come into force on 8 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the regulation of imports and exports through customs duties and other measures. The Act aims to facilitate trade while protecting domestic industries and revenue. Specifically, Part XVA of the Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce customs duties on certain imported goods if specified conditions are met. This mechanism was introduced to address the need for tariff concessions that could support Australian industries by allowing reduced duties on imported goods that are not domestically produced or are not directly substitutable with locally manufactured alternatives. The policy objective is to ensure that such concessions do not disadvantage domestic producers and are aligned with broader economic and trade policy goals.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs), which are intended to lower the rate of customs duty on specified goods, provided certain conditions are met. The Act applies to any person or entity seeking to import goods that may qualify for a tariff concession, specifically targeting industries that rely on the importation of goods not produced domestically. The legislation allows the Chief Executive Officer of Customs to grant concessions if no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, applying across all states and territories in Australia. However, it excludes certain goods specified in section 269SJ of the Act from being subject to a TCO. The Act’s application can be extended or restricted through subordinate instruments, such as regulations and orders, which provide further detail on the implementation and administration of tariff concessions.
Key Provisions
The Tariff Concession Instrument No. 0510476 pertains to a specific instance where the Customs Act 1901 allows for a concession on the customs duty applied to certain goods. This instrument, effective from 8 August 2005, concerns a concession for Mixing and Batching Lines, which are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Under this concession, the general rate of customs duty of 5% is reduced to 0% for these goods (section 269C, 269D, and 269E). The application for this concession was made by Blue Circle Southern Cement Ltd on 8 August 2005, and it was approved by the Chief Executive Officer of Customs (CEO) on 21 October 2005, after determining that no substitutable goods were produced in Australia at the time the application was lodged.
The Act imposes several obligations on the parties involved. It requires the CEO to consider whether the application for a tariff concession meets the core criteria outlined in section 269C, which includes ensuring that no substitutable goods were produced in Australia at the time of the application. If the CEO determines that the application satisfies these criteria, a written order (Tariff Concession Order or TCO) must be made, specifying the goods and the reduced duty rate (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the concession (subsection 269K(1)). In this case, no submissions were received opposing the concession.
Failing to comply with the requirements of the Customs Act 1901 can result in civil or criminal consequences. Although specific penalties are not outlined in the explanatory statement, breaches of customs regulations generally can lead to fines and imprisonment under the Customs Act. The severity of the penalty often depends on the nature and extent of the breach. Furthermore, any person who knowingly provides false or misleading information in an application for a tariff concession could face additional penalties under the general false statements provisions of the Act.