EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515341
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.
Humboldt Wedag Australia Pty Ltd applied for a TCO in respect of certain roll crushers on 4 November 2005.
Instrument
TCO No 0515341 was made on 21 April 2006. It declares that those certain roll 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. One submission objecting to the TCO application was received from Abon Engineering Pty Ltd.
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. 0515341 is taken to have come into force on 4 November 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 customs duties and the administration of tariffs, among other things. To address the need for tariff flexibility and to promote economic efficiency, the Act introduced the mechanism of Tariff Concession Orders (TCOs) under Part XVA, enabling the Chief Executive Officer of Customs to grant tariff concessions for specific goods. The objective is to ensure that such concessions are granted only when no substitutable goods are produced in Australia in the ordinary course of business, thereby avoiding any potential displacement of local production. TCO No. 0515341, made on 21 April 2006, is an example of this mechanism in action, where the CEO granted a concession on certain roll crushers, reducing their duty rate from 5% to 0%. This legislative provision and its application demonstrate the intent to support economic activity by facilitating access to competitively priced imported goods where local alternatives are not available.
Scope and Application
The Tariff Concession Instrument No. 0515341 applies to the concession of customs duty rates for certain roll crushers as specified by Humboldt Wedag Australia Pty Ltd. This Act operates under Part XVA of the Customs Act 1901, allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods not specified in section 269SJ of the Act, which includes goods that are environmentally harmful or pose a risk to national security. The TCO applies specifically to the reduction of customs duty from 5% to 0% for the specified roll crushers, provided the CEO is satisfied that no substitutable goods are produced in Australia. This instrument has a national reach, applying across all jurisdictions within Australia, as it is an extension of the Commonwealth's legislative authority. There are no stated exclusions or exemptions in this particular TCO, and its application is limited to the specific goods described in the order. The TCO came into force on the day the application was lodged, 4 November 2005, and does not affect the rights of persons other than the Commonwealth in relation to actions taken before its registration.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by the Tariff Concession Instrument No. 0515341, are sections 269C, 269F, 269P, and 269S. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application meets the core criteria, as outlined in section 269C, the CEO must make a TCO as specified in section 269P(3). Section 269S(1) provides the effective date of the TCO, which is the day on which the application was lodged.
The Customs Act 1901 imposes specific obligations on the CEO with regard to TCOs. Upon receiving an application, the CEO must determine whether the application meets the core criteria, which requires, among other things, that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a written TCO must be issued. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO.
The Act does not explicitly state any offences or penalties for breaches of the TCO provisions. However, it is implied that failure to comply with the requirements set out in the TCO, or the underlying provisions of the Customs Act 1901, could lead to enforcement actions. While the explanatory statement does not detail specific penalties, it is reasonable to infer that breaches could result in civil or criminal consequences, potentially including fines and other sanctions under the general provisions of the Customs Act 1901.
For importers, the TCO provides a benefit by potentially allowing a refund of customs duty on goods imported since the effective date of the TCO. This is facilitated under paragraph 126(1)(r) of the Customs Regulations, which allows importers to apply for duty refunds in such circumstances. Importantly, the TCO does not impose any new liabilities on any person and does not disadvantage anyone other than the Commonwealth.
Overall, the Tariff Concession Instrument No. 0515341 and the associated sections of the Customs Act 1901 establish a clear process for applying for and issuing TCOs, while also ensuring that the rights of third parties, such as importers, are protected. The provisions aim to streamline the application process while maintaining fairness and transparency.