EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618762
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.
St Ives Gold Mine applied for a TCO in respect of certain gold recovery lines on 23 November 2006.
Instrument
TCO No 0618762 was made on 2 March 2007. It declares that those certain gold recovery 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. 0618762 is taken to have come into force on 23 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 Customs Act 1901, enacted by the Commonwealth Parliament, establishes a scheme for Tariff Concession Orders (TCOs), which reduce the rate of customs duty on specified goods. This legislative instrument addresses the need to provide tariff relief to importers of goods that are not produced in Australia and for which there are no suitable domestic substitutes. This is achieved by allowing the Chief Executive Officer of Customs to grant concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. The objective is to support economic efficiency and competitive advantage for Australian businesses by ensuring that imports are not subject to tariffs if they cannot be efficiently produced domestically. The process involves applications to the CEO, who must determine if the application meets the core criteria, and if so, issue a TCO. The explanatory statement outlines the specifics of TCO No. 0618762, which was granted to St Ives Gold Mine for certain gold recovery lines, reducing their duty from 5% to 0% based on the absence of suitable Australian-produced alternatives.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a scheme where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. The Act allows individuals or entities to apply for a TCO if the goods they wish to import are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must then determine whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying the relevant reduced duty rate. In this case, St Ives Gold Mine successfully applied for a TCO on certain gold recovery lines, resulting in a reduced duty rate from 5% to 0%. The TCO does not affect any pre-existing rights or impose new liabilities on individuals or entities, except for beneficially affecting the rights of importers who can apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The primary operative sections of the Customs Act 1901, as they relate to the Tariff Concession Instrument No. 0618762, are found in sections 269C, 269B, 269E, 269F, 269P, and 269SJ. Section 269F enables a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. The CEO must determine whether the application meets the core criteria, which are outlined in sections 269C and 269B. If the application satisfies these criteria, the CEO must make a written order that declares the goods in question are subject to a specific rate of customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. This process ensures that only those goods for which no substitutable alternatives are produced in Australia can benefit from the concession.
The Act imposes certain obligations and requirements on the parties involved. The CEO has a duty to assess applications for TCOs to ensure they meet the core criteria, as outlined in section 269C. The CEO must also publish a notice in the Gazette inviting any interested parties to submit their views on whether a TCO should be made, as stated in subsection 269K(1). St Ives Gold Mine, the applicant in this case, must provide all necessary information and evidence to support their application, ensuring it complies with the criteria set out in the Act. Furthermore, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO comes into effect, as per subsection 269S(1).
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly detail these for the specific case of TCOs. However, general provisions within the Act may apply to any breaches of its requirements. For example, knowingly making a false statement in an application or providing misleading information could lead to civil or criminal penalties. Additionally, failure to comply with customs regulations generally could result in fines or other penalties as prescribed by the Act or related regulations. The exact penalties would depend on the nature and severity of the breach, but they could include substantial fines and, in some cases, imprisonment for serious offences.