EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604649
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.
Rio Tinto Services Ltd applied for a TCO in respect of certain used earthmovers pneumatic tyres on 1 March 2006.
Instrument
TCO No 0604649 was made on 5 May 2006. It declares that those certain used earthmovers pneumatic tyres 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 10%. 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. 0604649 is taken to have come into force on 1 March 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. 0604649, enacted in 2006 under the Customs Act 1901, was introduced to provide tariff concessions on specific goods, thereby addressing the need for more flexible and favourable customs duty rates for certain imported items. The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can grant lower rates of customs duty on goods specified in the order. This legislation was enacted by the Australian Parliament to facilitate trade by reducing the cost burden on importers, provided that the goods in question are not produced domestically and no suitable substitutes are available. The policy objective is to encourage the importation of goods by making them more competitively priced, thus supporting economic activities that rely on the availability of such goods.
Scope and Application
The Tariff Concession Instrument No. 0604649 applies to goods specified in the instrument, in this case certain used earthmowers pneumatic tyres, and to the person or entity applying for a tariff concession order, such as Rio Tinto Services Ltd. This instrument is an application of Part XVA of the Customs Act 1901, which enables the Chief Executive Officer of Customs to make Tariff Concession Orders to apply lower rates of customs duty to certain goods. The Act applies to any person or entity that may apply for such a concession, and it is concerned with goods that are imported into Australia and subject to customs duty. The scope of the Act is federal, applying throughout the Commonwealth of Australia. The Act excludes certain goods from being subject to a tariff concession order, as specified in section 269SJ of the Act, and the application process requires the CEO to be satisfied that no substitutable goods are produced in Australia. The application and operation of the Act may be extended or modified by subordinate instruments, which are subject to the requirements and limitations set out in the primary legislation.
Key Provisions
The main operative sections of the Customs Act 1901 that pertain to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO concerning specified goods. If the CEO is satisfied that the application is valid and meets the core criteria, as defined in section 269C, the CEO must issue a written order that constitutes the TCO. Section 269P(3) requires that if the CEO determines that the application meets the core criteria, they must make an order declaring that the goods in question are subject to a specified rate of duty outlined in Schedule 4 of the Customs Tariff Act 1995.
The Customs Act imposes several obligations on the parties involved. Firstly, any person who wishes to apply for a TCO must do so in accordance with section 269F and ensure that their application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO, upon receiving a valid application, must decide if it meets the core criteria under section 269C. If the application meets these criteria, the CEO must issue a TCO as outlined in section 269P(3). Additionally, as stipulated in subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the application. In this instance, no submissions were received.
The Act also outlines the consequences for non-compliance or breaches. Although the explanatory statement does not detail specific offences, penalties, or consequences, the general framework of the Customs Act and associated regulations would apply. Generally, failure to comply with the provisions of the Customs Act can result in civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. For instance, if a party fails to correctly apply for a TCO or if the CEO does not adhere to the procedural requirements, there could be legal ramifications. The specific penalties would be determined based on the nature and extent of the breach, in accordance with the broader provisions of the Customs Act and any relevant regulations.