EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515974
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.
Sun Metals Corporation applied for a TCO in respect of certain leaching plant agitators on 14 November 2005.
Instrument
TCO No 0515974 was made on 15 February 2006. It declares that those certain leaching plant agitators 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. 0515974 is taken to have come into force on 14 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 Commonwealth Parliament, provides a framework for the regulation of customs duties and other matters related to the importation and exportation of goods. One of the key mechanisms under this Act is the establishment of a scheme for Tariff Concession Orders (TCOs), which allow for the reduction of customs duty on certain goods. This scheme was introduced to address the need for flexibility in customs duty rates to support specific economic activities and industries. The Tariff Concession Instrument No. 0515974, made on 15 February 2006, is an example of this mechanism in action, as it grants tariff concessions for specific leaching plant agitators. The policy objective behind such concessions is to support the competitiveness of Australian industries by reducing the cost of importing necessary goods, thereby facilitating trade and economic growth.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to entities or individuals seeking reduced customs duties on specific goods that are not produced in Australia. The Act's provisions allow the Chief Executive Officer of Customs to grant a TCO to applicants, provided the goods do not fall under the exclusions specified in section 269SJ, and the core criteria outlined in sections 269C, 269B, and 269D are met. These criteria include ensuring that no substitutable goods are produced in Australia at the time the application is lodged. The geographic reach of this legislation is national, as it applies to the entire Commonwealth of Australia. While the TCO itself does not impose liabilities or disadvantage existing rights holders, it does provide benefits to importers by potentially allowing them to apply for a refund of duties paid on the specified goods since the TCO's effective date. The Act's application can be further extended or detailed through subordinate instruments, although no such extensions or restrictions are indicated in this specific TCO.
Key Provisions
The main operative sections of this legislation include section 269F which allows for an application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods; section 269C which sets out the core criteria that an application must meet, and section 269P(3) which requires the CEO to make a written order if the application meets these criteria. The legislation also specifies that the application must not be in respect of goods listed in section 269SJ, which are those that cannot be subject to a TCO. The instrument TCO No. 0515974 declares that certain leaching plant agitators are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thus granting them a concessional rate of customs duty.
The obligations imposed by this Act on the parties it governs include the requirement for the CEO to assess whether an application for a TCO meets the core criteria. This involves ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. Additionally, the CEO must make a written order if the application meets the core criteria, as specified in section 269P(3). The Act also ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
The consequences for non-compliance or breaches of this Act are not explicitly detailed in the text provided. However, under the general provisions of the Customs Act 1901, there could be potential civil or criminal penalties for those who do not adhere to the requirements set out by the Act, including the submission of false or misleading information in an application for a TCO. The specific penalties would depend on the nature and severity of the breach, and could include fines or other sanctions as determined by relevant authorities. The Act does ensure that the TCO does not affect the rights of a person other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.