EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610204
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.
Alcan Gove Development Pty Ltd applied for a TCO in respect of certain bucket wheel reclaimers on 9 June 2006.
Instrument
TCO No 0610204 was made on 1 September 2006. It declares that those certain bucket wheel 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. 0610204 is taken to have come into force on 9 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 Tariff Concession Instrument No. 0610204, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods, allowing for reduced customs duty rates. This instrument was developed in response to an application by Alcan Gove Development Pty Ltd for a Tariff Concession Order (TCO) concerning certain bucket wheel reclaimers, as outlined in the explanatory statement. The objective of this legislation is to provide tariff relief on particular goods, ensuring that these items are not subject to the standard customs duty rates. The instrument was enacted by the Chief Executive Officer of Customs, who, upon assessing the application against the core criteria set out in the Customs Act, determined that the application was valid and granted the tariff concession.
The instrument became effective on 9 June 2006, the date the application was lodged, and it applies a zero percent duty rate to the specified bucket wheel reclaimers, which previously had a general duty rate of five percent. The process included a public consultation phase, inviting submissions from interested parties; however, no submissions were received. The enactment of this TCO ensures that the rights of importers are positively affected, allowing them to seek duty refunds for imports since the effective date of the concession, while imposing no additional liabilities on any party.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) which apply lower rates of customs duty to particular goods. These orders are made by the Chief Executive Officer of Customs (the CEO) when an application is submitted and meets the criteria set out in the Act. The application process requires the CEO to ensure that the goods in question are not specified in section 269SJ of the Act, which lists those goods that are ineligible for a TCO, and that the core criteria of section 269C are satisfied, namely that no substitutable goods are produced in Australia in the ordinary course of business. If these conditions are met, the CEO is mandated to issue a written TCO, which specifies the applicable tariff item from Schedule 4 to the Customs Tariff Act 1995. In the case of TCO No. 0610204, the CEO granted a concession for certain bucket wheel reclaimers, setting their duty rate at 0% instead of the general rate of 5%. The TCO came into effect on the date of the application, 9 June 2006, and does not retroactively affect the rights of any person other than the Commonwealth, while potentially benefiting importers by allowing them to claim a refund of duty for imports since that date.
Key Provisions
The Customs Act 1901 (the Act) under Part XVA facilitates the establishment of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs (the CEO) can provide a lower rate of customs duty for certain goods, as seen in TCO No 0610204 (sections 269F, 269C, 269B, 269D, 269E, 269P(3)). This particular TCO, effective from 9 June 2006, pertains to certain bucket wheel reclaimers and sets the duty rate at 0%, down from the general rate of 5%, provided no substitutable goods were produced in Australia at the time of the application. The definition of substitutable goods is crucial here, as it means goods produced domestically that can be used for the same purpose as the goods in question.
For parties or entities involved, the Act imposes several obligations and requirements. Firstly, the CEO must ensure that any application for a TCO is not in relation to goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (section 269F). If the application passes this initial screening, the CEO must then assess whether the application meets the core criteria, particularly if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (sections 269C, 269D, 269E). Additionally, the CEO must publish a notice in the Gazette inviting any interested party to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)). In the case of TCO No 0610204, no such submissions were received, facilitating the order's issuance.
The Act outlines several potential consequences for breaches or non-compliance with the terms of a TCO. While the specific penalties for breaching the Customs Act 1901 are not detailed in this particular TCO, general penalties for breaches under the Customs Act can include substantial fines and imprisonment. For example, under section 223 of the Act, a person who knowingly or recklessly makes a false statement or representation to the CEO can face a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. The Act also allows for civil penalties where a person causes loss or damage to another person as a result of a contravention, with potential compensation claims available. In the context of TCOs, ensuring compliance is critical to avoid these severe repercussions.