EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516785
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.
Alcan Gove Development Pty Limited applied for a TCO in respect of certain alumina processing plant parts on 09 December 2005.
Instrument
TCO No 0516785 was made on 10 March 2006. It declares that those certain alumina processing plant parts 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. 0516785 is taken to have come into force on 09 December 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 was enacted to provide for the administration of customs and excise, and to impose customs duty on imported goods. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act addressed the need to provide relief on customs duties for specific goods that are not produced in Australia, thereby supporting industry competitiveness and economic efficiency. This instrument was created to facilitate tariff concessions for such goods, reducing the financial burden on businesses and consumers. The authority to make a TCO lies with the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0516785, made in 2006, applied these provisions to certain alumina processing plant parts, granting them a zero rate of duty under the Customs Tariff Act 1995. This measure aims to support the import of specific industrial components by removing the associated customs duty, thereby lowering costs for businesses and potentially consumers.
Scope and Application
The Tariff Concession Instrument No. 0516785 under the Customs Act 1901 applies specifically to the alumina processing plant parts identified in the application made by Alcan Gove Development Pty Limited. This legislation targets goods that are eligible for tariff concessions, provided that these goods are not subject to the exclusions outlined in section 269SJ of the Act. The application process involves the Chief Executive Officer of Customs (CEO) assessing whether the goods in question meet the core criteria established in sections 269C and 269D of the Act, which pertain to the production status of substitutable goods in Australia. If the CEO determines that no such substitutable goods are produced in Australia, a Tariff Concession Order (TCO) is issued, resulting in the applicable customs duty on the specified goods being set to free. The geographic reach of this Act is national, impacting all entities and individuals involved in the importation of these specific goods within Australia. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of persons as at the date of registration concerning actions taken prior to the TCO's effective date. This legislation is further extended through subordinate instruments, which might include regulations that specify detailed procedural aspects or additional conditions for the issuance and enforcement of TCOs.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). These orders allow for a lower rate of customs duty on specified goods, provided the application complies with certain criteria. For instance, the application must pertain to goods not listed in section 269SJ of the Act (s 269SJ). The CEO must determine whether the application meets the core criteria outlined in section 269C, which requires that, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business (s 269C). This determination involves understanding the definitions of 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' as provided in sections 269D, 269E, and 269F respectively (s 269B).
The CEO's obligations under the Act include assessing whether a TCO application meets the core criteria and, if satisfied, making a written order declaring that the specified goods are subject to a prescribed rate of duty (s 269P(3)). In the case of Alcan Gove Development Pty Limited's application for a TCO on certain alumina processing plant parts, the CEO was satisfied that no substitutable goods were produced in Australia and made the order on 10 March 2006 (TCO No. 0516785). This order declares that the goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5% (s 269P(3)).
The Act imposes several requirements and obligations on parties involved. The CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any person who believes the TCO should not be made (s 269K(1)). In this instance, no submissions were received. Additionally, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) in a way that disadvantages them or imposes liabilities for actions taken before the TCO's registration (s 269S(1)).
Should there be a breach of the Act's provisions, specific offences and penalties may apply. However, the explanatory statement does not detail these penalties. Generally, breaches of the Customs Act 1901 can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the offence. The exact penalties are not specified in the provided text but would be outlined in relevant sections of the Act and associated regulations.