EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609084
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.
Blue Circle Southern Cement Ltd applied for a TCO in respect of certain cement mills on 25 May 2006.
Instrument
TCO No 0609084 was made on 11 August 2006. It declares that those certain cement mills 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. 0609084 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. 0609084, enacted in 2006, operates under the Customs Act 1901 to facilitate the reduction of customs duties on certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative instrument addresses the need for the Australian government to provide targeted relief on specific goods, ensuring that Australian businesses remain competitive in the global market. The Tariff Concession Instrument was introduced by the relevant legislature to streamline the process of reducing customs duties on goods where substitutable alternatives are not produced domestically. The policy objective is to provide tariff concessions where appropriate, thus supporting economic efficiency and the competitiveness of Australian industries.
The instrument came into effect on the date the application was lodged, 25 May 2006, and was designed to take effect retroactively from that date, ensuring that any duties paid on the specified goods after this date could be refunded to importers. This mechanism allows for the equitable treatment of importers and ensures that no existing rights or liabilities are adversely affected by the introduction of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0609084 under the Customs Act 1901 applies to any entity or individual seeking tariff concessions for specific goods, in this case, certain cement mills applied for by Blue Circle Southern Cement Ltd. This legislation is of Commonwealth jurisdiction and its application extends to those who can demonstrate that no substitutable goods are produced in Australia. The core criteria for an application to be considered involves the absence of substitutable goods produced domestically in the ordinary course of business, as defined under sections 269C, 269D, 269E, and 269J of the Act. The Act also mandates the publication of notices inviting submissions regarding the application for a Tariff Concession Order, although in this instance, no submissions were received. The tariff concession, if approved, provides a reduction from the general rate of duty, which in this case is reduced from 5% to 0%. The commencement of the order aligns with the date the application was lodged, and the order does not affect the rights of any person adversely or impose new liabilities, though it does provide potential benefits such as duty refunds to importers of the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901, specifically concerning Tariff Concession Orders (TCOs) as outlined in the Explanatory Statement, involve the application process and criteria for TCOs (sections 269C, 269F, and 269SJ). When an applicant, such as Blue Circle Southern Cement Ltd, submits an application for a TCO (section 269F), the Chief Executive Officer (CEO) of Customs must assess whether the application meets the core criteria (section 269C). These criteria include ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged (section 269C). If satisfied, the CEO issues a TCO, specifying the lower rate of customs duty applicable to the goods (section 269P(3)). In this case, the TCO reduces the duty rate on certain cement mills from 5% to 0%.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application complies with the Act and does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be granted (subsection 269K(1)). Additionally, the CEO must make a written TCO if the application meets the core criteria, as established in section 269C. The Act also specifies that the TCO does not affect any pre-existing rights of persons, except for the Commonwealth, and does not impose any liabilities on any person (subsection 269S(1)).
In terms of offences and penalties, the Act does not explicitly state penalties for failing to comply with the TCO provisions. However, breaches of the Customs Act 1901 generally may result in civil or criminal penalties. For example, under section 236 of the Customs Act, engaging in prohibited importation or exportation activities may incur fines of up to 10,000 penalty units or imprisonment for up to 10 years, or both, for a corporation. Similarly, providing false or misleading information in a TCO application might also result in penalties under general criminal law provisions, which could include fines and imprisonment. The precise penalties would depend on the nature and severity of the breach, as well as other relevant laws.