EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608791
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.
BHP Billiton Iron Ore Pty Ltd applied for a TCO in respect of certain stackers and/or reclaimers on 22 May 2006.
Instrument
TCO No 0608791 was made on 11 August 2006. It declares that those certain stackers and/or reclaimers 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. 0608791 is taken to have come into force on 22 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. 0608791, enacted in 2006, amends the Customs Act 1901 by introducing a tariff concession order for certain stackers and/or reclaimers applied for by BHP Billiton Iron Ore Pty Ltd. This instrument addresses the gap in tariff rates for specific imported goods that are not produced domestically. The instrument was introduced by the Chief Executive Officer of Customs under the authority granted by Part XVA of the Customs Act 1901. The policy objective of this measure is to provide tariff relief to imported goods where no substitutable domestic production exists, thereby potentially reducing costs for importers and stimulating trade.
The Customs Act 1901, administered by the Parliament of Australia, enables the CEO to issue Tariff Concession Orders to provide duty relief on certain imported goods. This specific instrument was issued after BHP Billiton Iron Ore Pty Ltd applied for the concession on 22 May 2006. The CEO concluded that no substitutable goods were produced in Australia, satisfying the core criteria for the tariff concession. The order, which came into effect on the date of the application, provides a 0% duty rate on the specified goods, down from the general rate of 5%. This change does not affect existing rights or impose new liabilities on non-Commonwealth entities. Importers can benefit from this concession by applying for duty refunds on goods imported since the effective date of the order.
Scope and Application
The Tariff Concession Instrument No. 0608791 under the Customs Act 1901 applies specifically to the concession of customs duty on certain stackers and/or reclaimers, which are goods subject to the application made by BHP Billiton Iron Ore Pty Ltd on 22 May 2006. The Act allows the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) which grants a lower rate of customs duty on goods if certain criteria are met, in this case, that no substitutable goods were produced in Australia at the time of the application. The TCO was made on 11 August 2006, and it declares that the specified stackers and/or reclaimers are subject to a 0% duty rate, down from the general rate of 5%. This legislation operates within the Commonwealth jurisdiction and applies to any person or entity importing the specified goods into Australia. The TCO does not disadvantage any person by affecting their rights as at the date of registration and does not impose any new liabilities on persons other than the Commonwealth. The instrument came into force on the day the application was lodged, which is 22 May 2006. The scope of this legislation is limited to the specified goods and does not extend to other goods unless similarly applied for and approved under the Act.
Key Provisions
The main operative sections of this legislation concern the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). An application for a TCO can be made by any person to the Chief Executive Officer of Customs (the CEO) (section 269F). For an application to be considered, it must not be in respect of goods specified in section 269SJ of the Act, which are those goods that cannot be subject to a TCO. The CEO must then decide whether the application meets the core criteria set out in section 269C of the Act. If the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)).
Under the Act, the CEO has obligations to assess the validity of TCO applications and to ensure that they meet the core criteria outlined in section 269C. The CEO must also publish notices in the Gazette to invite submissions from interested parties once an application has been accepted as valid (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person as at the date of registration, except for the Commonwealth, and does not impose liabilities on any person in respect of anything done or omitted to be done before the date of registration.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for non-compliance with the TCO provisions. However, the failure to comply with the requirements for making a TCO could potentially lead to legal challenges or disputes regarding the validity of the TCO. The Customs Tariff Act 1995, which is referenced in the legislation, may impose penalties for customs duty evasion or non-compliance with customs regulations, but these are not explicitly detailed in the explanatory statement provided. Importers may be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.