EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610622
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.
Boddington Gold Mines applied for a TCO in respect of certain gold recovery electrolytic lines on 20 June 2006.
Instrument
TCO No 0610622 was made on 8 September 2006. It declares that those certain gold recovery electrolytic lines 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. 0610622 is taken to have come into force on 20 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 Parliament of Australia, provides a framework for managing customs and excise duties in Australia. Specifically, it allows for the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, aiming to address economic and trade policy objectives by providing tariff relief on certain goods. In this context, Tariff Concession Instrument No. 0610622 was introduced to provide tariff concessions for Boddington Gold Mines' application regarding certain gold recovery electrolytic lines, effective from 20 June 2006. This concession was granted as no substitutable goods were produced in Australia, thereby meeting the core criteria under the Act. The policy objective behind this instrument is to facilitate the import of specific goods at a reduced duty rate, thereby potentially stimulating economic activity and providing competitive advantages in the relevant industry.
Scope and Application
The Tariff Concession Instrument No. 0610622, under Part XVA of the Customs Act 1901, applies to goods for which an applicant, such as Boddington Gold Mines, seeks tariff concessions from the Chief Executive Officer of Customs (CEO). This application process is available to any person who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, thereby meeting the core criteria outlined in the Act. The instrument specifically addresses the application for a tariff concession order (TCO) in respect of certain gold recovery electrolytic lines, which now benefit from a reduced customs duty rate of 0%, down from the general rate of 5%. The application of this concession is geographically unrestricted within Australia, impacting all importers who bring in these specified goods. However, the application is limited by the exclusion criteria set out in section 269SJ of the Act, which prohibits certain goods from being subject to a TCO. The instrument also ensures that the TCO does not adversely affect existing rights or impose new liabilities on any person other than the Commonwealth, with a particular benefit to importers who can apply for duty refunds on imports made since the effective date of the TCO. The CEO is mandated to publish notices of accepted TCO applications in the Gazette, inviting objections, although in this case, no submissions were received.
Key Provisions
The Customs Act 1901, under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs (CEO) may reduce the rate of customs duty on specified goods. A person can apply to the CEO for a TCO under section 269F, provided that the goods are not those listed in section 269SJ which cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, which include the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Definitions for terms like 'substitutable goods' and 'ordinary course of business' are provided in sections 269D and 269E respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods eligible for a reduced rate of duty as specified in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties include the requirement for the CEO to evaluate each TCO application against the specified core criteria. If the CEO determines that an application is valid, they must make a TCO in writing, specifying the lower rate of duty. The CEO is also mandated to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO, as outlined in subsection 269K(1). In the case of TCO No. 0610622, the CEO did not receive any submissions opposing the concession.
The Act further outlines the consequences for non-compliance or breach of the provisions. Although the specific penalties are not detailed within the explanatory statement, it is generally understood that failure to adhere to the requirements of a TCO or the conditions set forth by the Act could result in legal action. The penalties could range from fines to more severe legal consequences, depending on the nature and severity of the breach. The Act ensures that the rights of individuals other than the Commonwealth are protected, and no liabilities are imposed on them in respect of actions taken before the TCO was registered. For importers, the TCO can lead to beneficial rights, such as the ability to apply for a refund of duty on goods imported since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations.