EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701686
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.
Sandvik Mining and Construction Adelaide Ltd applied for a TCO in respect of certain underground mining concrete sprayers on 31 January 2007.
Instrument
TCO No 0701686 was made on 30 April 2007. It declares that those certain underground mining concrete sprayers 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. 0701686 is taken to have come into force on 31 January 2007.
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 for the imposition of customs duties and other charges on imported goods, among other things. To address the economic impact on certain industries and to foster competitive practices, the Act allows for the issuance of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply reduced customs duty rates on specified goods. The Tariff Concession Instrument No. 0701686, introduced to provide tariff relief to Sandvik Mining and Construction Adelaide Ltd for their underground mining concrete sprayers, is an example of this provision in action. This instrument was made to ensure that no substitutable goods were produced in Australia at the time of application, thus meeting the core criteria outlined in the Act. The policy objective here is to facilitate economic efficiency and competitive practices by allowing certain goods to be imported at reduced duty rates if they are not being produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0701686 applies to Sandvik Mining and Construction Adelaide Ltd, as well as to the specific category of underground mining concrete sprayers that are the subject of the application. It is pertinent to the conduct and transactions involving the importation of these particular goods into Australia. This Instrument extends from the authority provided under the Customs Act 1901 and applies within the Commonwealth of Australia, affecting the rates of customs duty applied to the specified goods. It does not extend to goods listed in section 269SJ of the Act, which are explicitly excluded from tariff concession orders. The Instrument is effective from the date the application was lodged, 31 January 2007, and it does not impose any disadvantages or liabilities on persons other than the Commonwealth in relation to actions taken prior to its registration. The Instrument's application may also be extended or modified through subordinate instruments as authorised by the Customs Act 1901.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows individuals to apply to the CEO for a TCO on certain goods. If the application pertains to goods not specified in section 269SJ of the Act, which lists goods ineligible for TCOs, the CEO must assess whether the application meets the core criteria outlined in section 269C. This criterion is satisfied if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Sections 269B, 269D, and 269E provide definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the CEO determines that the application meets the core criteria, they are required to issue a written order (TCO) under section 269P(3) of the Act, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations under this Act for the parties involved primarily revolve around the process of applying for and assessing TCOs. An applicant must ensure their application complies with the requirements set forth in the Act, particularly in relation to the core criteria. The CEO, on the other hand, has the responsibility to review applications to determine their eligibility for TCOs and to make written orders if the criteria are met. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the application as soon as practicable after accepting it as valid, as stipulated in subsection 269K(1) of the Act. In the case of TCO No. 0701686, no submissions were received in response to the notice.
The Act does not explicitly outline specific offences or penalties for breaches related to TCOs. However, the failure to comply with the requirements of the Act or the misuse of a TCO could potentially lead to legal consequences under other relevant sections of the Customs Act 1901 or associated regulations. For example, any fraudulent or deceptive practices in the application process could be subject to penalties under general fraud provisions within the Act. The consequences for such breaches could include fines, imprisonment, or both, depending on the severity of the offence and the specific provisions of the Act that are contravened.
In summary, the Customs Act 1901 provides a structured process for the application, assessment, and issuance of Tariff Concession Orders. The main sections involved are 269F, 269SJ, 269C, 269B, 269D, 269E, and 269P(3). The obligations for applicants and the CEO revolve around ensuring that applications are valid and meet the core criteria for a TCO. While the Act does not specify penalties for TCO-related breaches, general penalties for non-compliance with the Customs Act 1901 may apply.