EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702241
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.
Copperco Limited applied for a TCO in respect of a certain crushing plant on 13 February 2007.
Instrument
TCO No 0702241 was made on 03 August 2007. It declares that those certain crushing 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. 0702241 is taken to have come into force on 13 February 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, provides a framework for the administration of customs and excise, including the ability to grant tariff concessions through Tariff Concession Orders (TCOs). The introduction of the Customs Act 1901 was to address the need for a streamlined process to reduce customs duties on specific goods, thereby promoting trade and economic efficiency. Specifically, the explanatory statement for Tariff Concession Instrument No. 0702241, made under the authority of the Customs Act 1901, highlights the process by which the Chief Executive Officer of Customs (CEO) can grant a TCO to Copperco Limited for a certain crushing plant. This concession aims to ensure that no substitutable goods are produced in Australia, thus allowing for a tariff reduction from the general rate of 5% to a duty-free status for the specified goods. The policy objective is to facilitate trade by reducing the cost burden on importers, as evidenced by the allowance for duty refunds under the Regulations. The instrument was made on 3 August 2007 and is considered to have come into force on 13 February 2007, the date the application was lodged, without imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism allows for a lower rate of customs duty on goods that meet certain criteria outlined in the Act, provided no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The Act applies to any individual or entity that seeks to import goods into Australia and is interested in obtaining tariff concessions. The scope of the Act extends to the entire Commonwealth of Australia, as it pertains to federal customs legislation. The Act does not apply to goods specified in section 269SJ, which are ineligible for TCOs. The application of the Act may be further refined through subordinate instruments, although the primary provisions are contained within the Act itself. For instance, TCO No. 0702241, which concerns a certain crushing plant, was issued following a successful application by Copperco Limited, illustrating how the Act operates in practice to provide tariff relief on specific goods.
Key Provisions
The Tariff Concession Instrument No. 0702241, made under section 269F of the Customs Act 1901, allows for a reduction in customs duty on certain goods, specifically certain crushing plants in this instance (sections 269F and 269P). This tariff concession is granted when the Chief Executive Officer (CEO) of Customs determines that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). For this particular instrument, the CEO was satisfied that no such substitutable goods were produced in Australia, leading to the concession that the customs duty on these goods is free, down from the general rate of 5% (section 269P(3)).
The Act imposes certain obligations on parties applying for a Tariff Concession Order (TCO), as well as on the CEO when processing these applications. An applicant must submit a valid application to the CEO, ensuring it does not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs (section 269F). The CEO, in turn, has the obligation to assess whether the application meets the core criteria, primarily focusing on the non-existence of substitutable goods produced in Australia (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)).
Failure to comply with the requirements set forth by the Customs Act 1901 can result in civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, it is implied that breaches of the Act could lead to legal action. The precise penalties would depend on the nature and severity of the breach, and would be determined by the relevant court. It is also worth noting that the TCO does not affect any existing rights of persons (other than the Commonwealth) or impose any liabilities on anyone for actions taken prior to the registration of the TCO (subsection 269S(1)).
The Tariff Concession Order No. 0702241 is deemed to have come into force on the date the application was lodged, which was 13 February 2007 (subsection 269S(1)). This means that from that date, the customs duty on the specified crushing plants was reduced to free. Importers of these goods can apply for a refund of any duty paid since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). Importantly, this TCO does not impose any new liabilities on any person and does not disadvantage anyone who had rights as of the registration date.