EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602384
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 grinding and beneficiation process line on 17 January 2006.
Instrument
TCO No 0602384 was made on 18 April 2006. It declares that those certain grinding and beneficiation process 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. 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. 0602384 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 Tariff Concession Instrument No. 0602384 was introduced under the Customs Act 1901 to address the need for tariff concessions on specific imported goods, ensuring that Australian businesses can compete effectively by reducing the cost of importing certain goods. Enacted by the Parliament of Australia, the objective of this legislation is to facilitate economic efficiency and growth by lowering customs duties for particular goods, thereby making them more affordable and accessible. This instrument specifically targets the application made by LionOre Australia Pty Ltd for tariff concessions on certain grinding and beneficiation process lines, which have a general duty rate of 5%. Upon assessing that no substitutable goods were produced in Australia, the Chief Executive Officer of Customs issued a concession, setting the duty rate at 0% for these goods, effective from the date the application was lodged.
The instrument was developed following a process of consultation where no objections were raised against the concession, and it came into force on the date the application was made, 17 January 2006. Importantly, it ensures that no pre-existing rights or liabilities of any person, apart from the Commonwealth, are adversely affected by this concession, thereby protecting the interests of all parties involved.
Scope and Application
The Tariff Concession Instrument No. 0602384 under the Customs Act 1901 applies to entities seeking tariff concessions on specific goods, namely LionOre Australia Pty Ltd's application for a concession on certain grinding and beneficiation process lines. The instrument is designed to facilitate the application process for tariff concessions, ensuring that goods eligible for reduced customs duties are identified and processed correctly. The instrument is applicable nationally, as it is an instrument under the Commonwealth's Customs Act 1901. It does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument's application is restricted to cases where no substitutable goods are produced in Australia, as outlined in section 269C of the Act. The instrument was made on 18 April 2006, and it came into force on 17 January 2006, the date the application was lodged. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied in this context, include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), provided the goods in question are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, the CEO must issue a TCO (section 269P). The terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269B, respectively. Additionally, section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions from interested parties after accepting the TCO application as valid.
The Act imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure their application is made in accordance with section 269F and is not for goods listed in section 269SJ. The CEO of Customs must evaluate the application against the core criteria set out in section 269C, particularly focusing on whether any substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the application meets these criteria, the CEO is required to issue a TCO under section 269P. Furthermore, upon accepting a valid application, the CEO must publish a notice in the Gazette, as per section 269K, inviting any person who believes there are reasons why the TCO should not be made to submit their views.
Failure to comply with the requirements set out in the Customs Act 1901 and the associated regulations could lead to various consequences. Although the explanatory statement does not specify particular offences or penalties for non-compliance with the TCO process, breaches of other provisions of the Customs Act 1901 can result in significant penalties. For example, section 269AA of the Act provides that a person who contravenes a provision of the Act is liable to a penalty of up to $22,200 for individuals and $111,000 for bodies corporate, depending on the nature and seriousness of the offence. Additionally, the Act may provide for civil and criminal penalties, including imprisonment, for serious or repeated breaches.