EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606095
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 ore conveyors on 31 March 2006.
Instrument
TCO No 0606095 was made on 23 June 2006. It declares that those certain ore conveyors 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. 0606095 is taken to have come into force on 31 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 Customs Act 1901 was enacted by the Australian Parliament to establish a comprehensive framework for the regulation of customs duties and related matters. This Act, as amended, addresses the need for a structured approach to the administration of customs duties, ensuring that the processes are clear and the rights and obligations of all parties are well defined. One particular aspect of the Customs Act 1901 is the scheme for Tariff Concession Orders (TCOs) under Part XVA, which allows for the reduction of customs duty on certain imported goods. The primary policy objective of this scheme is to promote trade efficiency by lowering the cost of importing specific goods that do not have local substitutes, thereby encouraging economic growth and competitiveness. The Explanatory Statement for Tariff Concession Instrument No. 0606095 illustrates the application of this scheme, detailing the process through which Rio Tinto Services Ltd successfully applied for a TCO for certain ore conveyors, resulting in a zero percent duty rate on these goods.
Scope and Application
The Tariff Concession Instrument No. 0606095 is a component of the Customs Act 1901, specifically operating under the provisions set out in Part XVA of the Act, which pertains to Tariff Concession Orders (TCO). This legislative instrument applies to entities or individuals seeking a reduction in customs duty on specified goods by applying for a TCO. The application process involves an assessment by the Chief Executive Officer of Customs (CEO) to determine if the goods in question are eligible for a concession, which hinges on the criterion that no substitutable goods are produced in Australia in the ordinary course of business. The instrument affects entities involved in the importation of the specified goods, namely Rio Tinto Services Ltd in this instance, and applies to the broader industry of goods importation subject to the Customs Act 1901 throughout Australia. The application of this Act extends nationally as it is a Commonwealth Act, thereby encompassing all states and territories within Australia. There are exclusions as outlined in section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The application of the TCO may be further defined or extended through subordinate instruments, such as regulations or further orders, which can provide additional specificity or conditions to the application of the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0606095 under the Customs Act 1901 include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application meets the core criteria outlined in sections 269C, 269B, and 269P, the CEO must make a written order declaring the goods in question as subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced rate of customs duty (section 269P(3)). In this particular case, Rio Tinto Services Ltd applied for a TCO for certain ore conveyors on 31 March 2006, and the CEO was satisfied that the application met the core criteria, leading to the issuance of TCO No. 0606095 on 23 June 2006. This order declared that the certain ore conveyors are subject to item 50 of Schedule 4 of the Tariff, with a reduced duty rate of 0% (section 269S(1)).
The Act imposes several obligations and requirements on the parties and entities it governs. Firstly, any person who wishes to apply for a TCO must do so under section 269F and ensure that the goods in question are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO, in turn, must ensure that the application meets the core criteria as outlined in sections 269C, 269B, and 269P. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to the invitation.
The Customs Act 1901 outlines potential offences, penalties, or civil/criminal consequences for breach. However, the Explanatory Statement does not provide specific information about penalties or consequences for failing to comply with the Act's requirements or for breaching a TCO. It is essential for parties and entities governed by the Act to ensure they adhere to the provisions and requirements set out in the legislation to avoid any potential repercussions.