EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602383
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.
Lionore Australia Pty Ltd applied for a TCO in respect of certain ore crushing processing line on 17 January 2006.
Instrument
TCO No 0602383 was made on 24 July 2006. It declares that those certain ore crushing processing 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. 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. 0602383 is taken to have come into force on 17 January 2006.
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 Parliament of Australia, provides a framework for the regulation of customs and excise duties in Australia. This Act was updated to address the need for a structured approach to granting tariff concessions on imported goods, aiming to facilitate trade and economic growth by potentially lowering the cost of imported goods. The Tariff Concession Instrument No. 0602383 was introduced in 2006 to provide a specific instance of such concessions. This instrument was enacted to respond to an application by Lionore Australia Pty Ltd for a tariff concession on certain ore crushing processing lines. The policy objective here is to ensure that the application of tariff concessions supports economic activities by making certain imported goods more affordable, thereby encouraging trade and investment while ensuring that the process is open to public scrutiny and objections.
Scope and Application
The Tariff Concession Instrument No. 0602383 under the Customs Act 1901 applies to the goods specified in the instrument, in this case, certain ore crushing processing lines. The instrument is applicable to the applicant, Lionore Australia Pty Ltd, and potentially any other importers of similar goods. The instrument is national in scope as it is a Commonwealth Act. The instrument does not apply to goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a Tariff Concession Order (TCO). The application process involves the applicant meeting the core criteria as outlined in section 269C of the Act, which is determined by the Chief Executive Officer of Customs. The instrument may be extended or restricted through subordinate instruments, such as regulations, although this specific instrument does not indicate any such extensions or restrictions. The instrument came into force on the day the application was lodged, 17 January 2006, and does not affect the rights of persons as at the date of registration so as to disadvantage them or impose liabilities in respect of anything done or omitted to be done before the date of registration.
Key Provisions
The Tariff Concession Instrument No. 0602383, made under section 269F of the Customs Act 1901, pertains to the concession of customs duty rates for certain ore crushing processing lines (section 269F(1)). The instrument declares that these specific goods are subject to a 0% customs duty rate, down from the general 5% duty rate (subsection 269P(3)). This concession applies because the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were being produced in Australia at the time the application was lodged (section 269C). The CEO must ensure that the application meets the core criteria, particularly that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Definitions of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
The obligations under the Customs Act 1901 require any applicant seeking a Tariff Concession Order (TCO) to ensure their application complies with the core criteria, particularly that no substitutable goods are produced in Australia (section 269C). The CEO must publish a notice in the Gazette inviting submissions from any person who may object to the TCO (subsection 269K(1)). Upon accepting a valid application, the CEO must also decide whether the application meets the core criteria (section 269C). If satisfied, the CEO must make a written order declaring the specified goods subject to the concession (subsection 269P(3)). The TCO is deemed to have come into force on the day the application was lodged (subsection 269S(1)), without affecting the rights of any person except the Commonwealth.
The Customs Act 1901 imposes civil and administrative consequences for breaches of its provisions, including the making of TCOs. Any person found to have contravened the terms of a TCO or provided false or misleading information in their application may face penalties. Under the Customs Act 1901, penalties can include fines up to a maximum of 10,000 penalty units for individuals and 50,000 penalty units for corporations, in addition to other civil remedies (subsection 269R(2)). The Act also provides for the recovery of duties and penalties through legal proceedings. The penalties underscore the importance of compliance with the Act and the conditions governing the issuance of TCOs.