EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516376
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 Pty Ltd applied for a TCO in respect of certain Leaching Plant Rakes on 14 November 2005.
Instrument
TCO No 0516376 was made on 30 January 2006. It declares that those certain Leaching Plant Rakes 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. 0516376 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 Tariff Concession Instrument No. 0516376, enacted in 2006 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, in this case certain Leaching Plant Rakes, which were not being produced in Australia. The instrument was made by the Chief Executive Officer of Customs, following an application from Sun Metals Corporation Pty Ltd, and it establishes a zero per cent duty rate on these goods as opposed to the general rate of five per cent. The instrument was published in the Gazette, inviting any interested parties to object, though no objections were received. The concession is effective from the date the application was lodged, 14 November 2005, and it benefits importers by allowing them to claim refunds on duty paid on imports of these goods since that date. This legislative action was taken to support industry by reducing costs associated with importing these specific goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can lower the customs duty rate for certain goods, provided that the applicant meets the core criteria set out in the Act. The TCO process is applicable to individuals or entities seeking tariff concessions for goods not produced in Australia in the ordinary course of business and not listed in section 269SJ, which excludes specific goods from eligibility. The application process requires the applicant to demonstrate that no substitutable goods are produced domestically, thereby qualifying the goods for a concession. The TCO No. 0516376, which pertains to certain Leaching Plant Rakes, was registered on 14 November 2005, and the concession came into force on the same date. This legislation does not disadvantage any persons or impose liabilities on them for actions taken prior to the registration of the TCO, and it extends to all jurisdictions within Australia as per the Customs Act 1901.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0516376 are section 269C, 269P, and 269S, which outline the core criteria for a Tariff Concession Order (TCO) and the process for applying for a TCO (section 269F). Section 269C specifies 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 mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application meets these criteria, they must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S addresses the commencement of a TCO, stipulating that it is effective from the date the application was lodged.
The Act imposes several obligations and requirements on the parties involved. The CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). Additionally, the CEO must ensure that the application meets the core criteria before issuing a TCO, specifically verifying that no substitutable goods were produced in Australia (section 269C). Furthermore, the Act ensures that the rights of persons (other than the Commonwealth) are not adversely affected by the TCO, nor are they imposed with any liabilities for actions taken before the TCO's effective date (subsection 269S(1)).
Breaches of the provisions under this Act can result in both civil and criminal consequences. Specifically, section 269 of the Customs Act 1901 outlines the penalties for non-compliance, which can include fines and imprisonment. For instance, providing false or misleading information in an application for a TCO can result in a fine of up to 10,000 penalty units or imprisonment for up to two years, or both (section 269ZG). Failure to comply with the TCO conditions can also result in the imposition of customs duty at the full rate, along with potential penalties for any associated tax evasion or fraud. The specific penalties depend on the nature and severity of the breach.