EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618629
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.
Fortescue Metals Group Limited applied for a TCO in respect of a certain beneficiation plant on 17 November 2006.
Instrument
TCO No 0618629 was made on 09 February 2007. It declares that those certain beneficiation plants 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 free.
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. 0618629 is taken to have come into force on 17 November 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. 0618629 was enacted in 2007 under the Customs Act 1901, addressing the need to provide tariff concessions for specific goods imported into Australia. This instrument allows for the application of lower rates of customs duty on certain goods, which is beneficial for importers and supports the economic efficiency of trade. The instrument was introduced to address the specific case of Fortescue Metals Group Limited, which applied for a tariff concession for a particular beneficiation plant. The process involves the Chief Executive Officer of Customs making a decision on whether the application meets the core criteria, which includes assessing whether substitutable goods are produced in Australia. In this instance, the CEO determined that no substitutable goods were produced in Australia, leading to the tariff concession being granted.
The enacting body responsible for this instrument is the Australian Government, and the policy objective is to facilitate trade by providing tariff relief where appropriate, ensuring that Australian businesses and industries can compete effectively in the global market. The instrument's commencement date is the same as the date the application was lodged, ensuring that any rights or liabilities arising from the concession are properly managed from the outset.
Scope and Application
The Customs Act 1901, as amended, incorporates a framework that facilitates the making of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking to import goods that may qualify for tariff concessions, thereby reducing the customs duty rate for these goods. Specifically, the Act applies to the process of applying for and receiving a TCO for goods not produced in Australia in the ordinary course of business and not specified as ineligible under section 269SJ. The geographic scope of the Act is national, as it operates under the Commonwealth jurisdiction, although its effects are felt in the import and trade sectors across Australia. The Act allows for the application of TCOs to be extended or restricted via subordinate instruments, which may include regulations or further orders specified under the Customs Act or related instruments such as the Customs Tariff Act 1995. Any person, other than the Commonwealth, is not disadvantaged or imposed with liabilities in respect of actions taken prior to the registration of a TCO.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by the Tariff Concession Instrument No. 0618629, pertain to the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) under section 269F (1). These sections clarify the conditions under which an application for a TCO may be made and the criteria that must be met for the CEO to grant such a concession. Specifically, section 269C specifies that an application will meet the core criteria if no substitutable goods are produced in Australia on the day the application was lodged, and section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods."
The Act imposes several obligations on the parties involved. Firstly, it mandates that any person seeking a TCO must apply to the CEO in accordance with section 269F. The CEO, upon receiving a valid application, is required under section 269P(3) to make a written order if the application meets the core criteria. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections, as stipulated in section 269K(1). In the case of TCO No. 0618629, no submissions were received, indicating that the application process was transparent and unopposed.
Failure to comply with the provisions of the Customs Act 1901 can result in significant consequences. While the explanatory statement does not detail specific offences or penalties, it is known that breaches of the Act can lead to both civil and criminal penalties. Generally, under the Customs Act, offences may result in fines and imprisonment, with the severity of the penalties depending on the nature and extent of the breach. For example, fraudulent misrepresentations or deliberate non-compliance could lead to criminal charges and substantial fines, while administrative errors might result in civil penalties. The maximum penalties for such offences are outlined in the Act and may vary based on the specific circumstances of the violation.