EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609671
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.
Onesteel Manufacturing Pty Ltd applied for a TCO in respect of certain ore crushers on 1 June 2006.
Instrument
TCO No 0609671 was made on 9 November 2006. It declares that those certain ore 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. 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. 0609671 is taken to have come into force on 1 June 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, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act was designed to address the need for tariff relief on specific goods that do not have local substitutes, thereby supporting industries that might otherwise be at a competitive disadvantage due to higher import costs. The Tariff Concession Instrument No. 0609671, introduced on 9 November 2006, applies to certain ore crushers, providing them with a concessional tariff rate of 0% as opposed to the general rate of 5%. This legislative instrument follows the process outlined in the Act, ensuring that any objections to the concession are considered, and it ensures that the rights of importers are protected while not imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0609671, made under the Customs Act 1901, applies specifically to entities or individuals who seek a reduction in customs duty on certain imported goods by applying for a Tariff Concession Order (TCO). The Act allows for the CEO of Customs to reduce the duty on goods specified in a TCO provided certain conditions are met, notably that no substitutable goods are produced in Australia. This legislative instrument pertains to the Commonwealth level and affects the importation of specific goods, in this case, certain ore crushers, which now benefit from a reduced duty rate from 5% to 0%. The TCO applies nationally, influencing importers across Australia who are importing these ore crushers. Importantly, the application of the TCO does not retroactively affect any rights or impose any liabilities on individuals or entities for transactions occurring prior to the TCO's effective date. The scope of the TCO can potentially be extended or refined through subordinate instruments, although the primary legislation details the core criteria and process for such concessions.
Key Provisions
The Tariff Concession Instrument No. 0609671 is an instrument made under section 269F of the Customs Act 1901 (the Act) that provides for a lower rate of customs duty on certain ore crushers. The instrument, published on 9 November 2006, specifies that the rate of duty on these goods, as defined in item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), is reduced from the general rate of 5% to 0% (section 269P(3)). This reduction applies because the Chief Executive Officer of Customs (the CEO) was satisfied that no substitutable goods were produced in Australia at the time the application was made (section 269C).
The CEO has a duty to consider applications for Tariff Concession Orders (TCOs) in accordance with the Act, which includes ensuring that the application does not pertain to goods specified in section 269SJ of the Act that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria, they must issue a written TCO (section 269P(3)). In this case, the CEO made TCO No. 0609671 following Onesteel Manufacturing Pty Ltd’s application for a concession on certain ore crushers.
Under the Act, the CEO is required to publish a notice in the Gazette inviting objections to the TCO application as soon as practicable after accepting it as valid (subsection 269K(1)). A submission objecting to the TCO was received from Abon Engineering Pty Ltd. However, the TCO, which came into force on 1 June 2006, the date the application was lodged, does not affect the rights of persons other than the Commonwealth in a manner that would disadvantage them or impose liabilities for actions taken before the registration date (subsection 269S(1)). The rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Breaches of the provisions of the Customs Act 1901 may result in civil or criminal penalties. For example, section 228 of the Act provides for criminal penalties for knowingly importing goods in contravention of the Act, including fines and imprisonment. Similarly, section 235 imposes penalties for breaches of certain sections of the Act, which may include fines and, in serious cases, imprisonment. While the specific penalties are not detailed in the Explanatory Statement for TCO No. 0609671, the potential for severe penalties underscores the importance of compliance with the Act’s provisions.