EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609006
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.
Sandvik Mining and Construction applied for a TCO in respect of certain cutters and/or crushers on 25 May 2006.
Instrument
TCO No 0609006 was made on 11 August 2006. It declares that those certain cutters and/or crushers 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. 0609006 is taken to have come into force on 25 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. 0609006, enacted in 2006 under the Customs Act 1901, addresses the need to facilitate the importation of specific goods by reducing their customs duty rates, thereby promoting economic efficiency and competitiveness. This instrument was developed in response to an application by Sandvik Mining and Construction for tariff concessions on certain cutters and crushers, aiming to ensure that these imports are not subject to higher duty rates than necessary. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders when certain criteria are met, such as the absence of substitutable goods produced in Australia. In this instance, the CEO found that no such substitutable goods were being produced domestically, leading to the decision to grant a zero percent duty rate on the specified cutters and crushers, down from the general rate of five percent. This instrument was introduced to enhance the efficiency of the import process and to support the competitive landscape of the relevant industries in Australia.
Scope and Application
The Tariff Concession Instrument No. 0609006 applies to specific cutters and/or crushers, with the application made by Sandvik Mining and Construction. This instrument operates under the Customs Act 1901 and allows for a lower rate of customs duty, reducing the general rate of 5% to 0% for the specified goods. The Act applies to any entity or individual seeking tariff concessions for goods that meet the criteria set forth in the Act. This legislation extends to the entire Commonwealth of Australia, ensuring that the tariff concessions are uniformly applicable across all states and territories. Exclusions from this concession include goods specified in section 269SJ of the Customs Act 1901, which lists items ineligible for tariff concessions. The scope of the Act is further defined by the conditions outlined in sections 269C, 269D, and 269E, which detail the requirements for the absence of substitutable goods produced in Australia and the ordinary course of business. The application process involves a submission to the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria before making a decision. Any interested parties may lodge submissions to counter the application, though in this instance, none were received. The TCO takes effect from the date the application was lodged, providing immediate benefits to the rights of importers who can apply for a refund of duties paid on the goods since that date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO) (section 269F). An applicant, such as Sandvik Mining and Construction, can request a TCO for certain goods if they meet the core criteria outlined in section 269C. This criterion includes the condition that no substitutable goods are produced in Australia at the time of application (section 269D, 269E). If the CEO determines that the application meets these criteria, they are obligated to issue a written TCO (section 269P(3)). In the case of TCO No. 0609006, certain cutters and/or crushers were declared as goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a 0% duty rate instead of the general 5% (section 269P(3)).
Entities such as Sandvik Mining and Construction must ensure their applications meet the core criteria, particularly focusing on the absence of substitutable goods produced in Australia. Additionally, the CEO has an obligation to publish a notice in the Gazette inviting any person who might oppose the TCO to submit their views (subsection 269K(1)). This ensures transparency and allows for potential objections to be considered before the TCO is finalised. In this instance, no objections were received by the CEO, allowing the TCO to proceed without further contention.
Breaching the conditions set by the Customs Act 1901, including providing false information in a TCO application, may result in legal consequences. While the explanatory statement does not specify penalties, general provisions under the Customs Act could include fines or imprisonment, depending on the severity of the breach. The exact penalties would be determined by the courts based on the specific circumstances of the case.
The TCO No. 0609006 came into effect on the date the application was lodged, 25 May 2006 (subsection 269S(1)). This means that from that date, the specified cutters and/or crushers were eligible for the concessional duty rate of 0%. Importantly, this TCO does not affect the rights of any person as they stood on the registration date, nor does it impose any new liabilities on any person (subsection 269S(1)). Importers of the affected goods can apply for duty refunds for goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).