EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606807
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 Coal Australia Pty Ltd applied for a TCO in respect of certain crushing and conveying plant on 15 May 2006.
Instrument
TCO No 0606807 was made on 20 October 2006. It declares that those certain crushing and conveying plant 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. 0606807 is taken to have come into force on 15 May 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. 0606807, enacted in 2006, amends the Customs Act 1901 by establishing a scheme under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs). This instrument was introduced to address the need for tariff concessions on specific goods that meet certain criteria, allowing for a lower rate of customs duty. The Customs Act 1901, enacted by the Australian Parliament, provides the legal framework for customs duties and includes provisions for tariff concessions through the creation of TCOs. The policy objective of this legislation is to provide relief to importers by reducing the customs duty on certain goods, provided that no substitutable goods are produced in Australia at the time of the application. The Tariff Concession Instrument No. 0606807 specifically addresses an application by Rio Tinto Coal Australia Pty Ltd for certain crushing and conveying plant, resulting in a concession that reduces the duty rate from 5% to 0%.
Scope and Application
The Customs Act 1901, as amended, provides the legislative framework for the Tariff Concession Instrument No. 0606807, which pertains to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO) concerning certain crushing and conveying plant. This legislation applies to any entity or person who has applied for a tariff concession in respect of specified goods, ensuring that if the CEO determines the application meets the core criteria, a TCO can be issued, thereby granting a lower rate of customs duty. The Act is applicable on a national level across Australia, extending its reach to any entity or individual seeking tariff concessions for goods that meet the specified conditions, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The application process includes mandatory consultation, whereby the CEO must publish a notice in the Gazette inviting submissions from any interested parties, such as Abon Engineering Pty Ltd in this case. Notably, the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken prior to the registration date. Furthermore, the instrument's application is not limited to the principal Act but can be extended or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0606807, under the Customs Act 1901 (section 269F), concern the process by which an application for tariff concession can be made and the conditions that must be met for the Chief Executive Officer of Customs (CEO) to grant such an order. If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a written order declaring that the goods in question are eligible for a tariff concession. This instrument, TCO No. 0606807, specifies that certain crushing and conveying plant are eligible for a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods were produced in Australia on the date of application.
The Act imposes certain obligations and requirements on the parties involved. Firstly, the applicant, in this case, Rio Tinto Coal Australia Pty Ltd, must submit an application to the CEO for a Tariff Concession Order (section 269F). The CEO must then determine whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any objections to the proposed tariff concession (subsection 269K(1)), ensuring transparency and opportunity for stakeholders to voice their concerns. In this instance, Abon Engineering Pty Ltd lodged an objection, which the CEO considered in making the final decision.
Failure to comply with the provisions of the Customs Act 1901 may lead to various consequences. Although the explanatory statement does not explicitly detail offences or penalties for breaches, it is understood that non-compliance with the Customs Act can result in civil or criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach. The maximum penalties would be in line with the relevant sections of the Customs Act and any associated regulations.
The Tariff Concession Order No. 0606807, effective from 15 May 2006, does not affect the rights of any person except the Commonwealth, ensuring that no pre-existing rights are adversely impacted by the concession. Importers of the specified goods can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This provision ensures that the benefits of the tariff concession are passed on to those who import the goods, thus aligning the incentives of the parties involved.