EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703431
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.
Joy Mining Machinery applied for a TCO in respect of certain mining conveyor parts on 2 March 2007.
Instrument
TCO No 0703431 was made on 25 May 2007. It declares that those certain mining conveyor parts 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. 0703431 is taken to have come into force on 2 March 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 was enacted to provide for the regulation of the importation and exportation of goods in Australia. Among other provisions, it allows for the creation of Tariff Concession Orders (TCOs) through which certain goods can benefit from a lower rate of customs duty. This scheme was introduced to address the need for tariff flexibility in response to specific economic and trade circumstances, allowing for targeted reductions in duty rates for particular goods that meet certain criteria. The instrument F2007L01706, Tariff Concession Instrument No. 0703431, was made under the authority of the Customs Act by the Chief Executive Officer of Customs, following an application from Joy Mining Machinery for a concession on certain mining conveyor parts. The instrument was issued to provide a 0% duty rate on these specific parts, effective from 2 March 2007, the date of the application, aligning with the policy objective of facilitating trade by reducing the cost of importing specific goods. The instrument was made without any submissions against it, as no objections were raised in response to the published notice inviting such submissions.
Scope and Application
The Customs Act 1901, as amended, facilitates the establishment of Tariff Concession Orders (TCOs) through Part XVA, allowing for lower customs duty rates on specified goods. This process is applicable to any person who may seek a reduction in customs duty for goods not produced domestically, provided they meet the core criteria outlined in the Act. The Chief Executive Officer of Customs has the authority to make these orders, subject to the application not being in respect of goods listed in section 269SJ, which are ineligible for tariff concessions. The application of TCOs is national in scope, impacting all jurisdictions within Australia, and applies to industries and entities involved in the importation of the specified goods. Exclusions are noted for goods listed in section 269SJ, which cannot be subject to a TCO. The instrument itself, TCO No. 0703431, specifically pertains to certain mining conveyor parts and was made effective from the date of the application, 2 March 2007, with no retroactive effect on existing liabilities or rights.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0703431, which amends the Customs Act 1901, declare that certain mining conveyor parts are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). This means that these particular goods will benefit from a tariff concession, reducing the rate of duty from the general rate of 5% to 0%. This declaration was made by the Chief Executive Officer of Customs (CEO) on 25 May 2007, following an application by Joy Mining Machinery on 2 March 2007, and was based on the CEO's satisfaction that no substitutable goods were being produced in Australia at the time (section 269C).
The Act imposes certain obligations on the CEO, including the requirement to assess whether an application for a Tariff Concession Order (TCO) meets the core criteria, which involves determining whether any substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the specified goods to be subject to the tariff concession (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received in response to the published notice.
The legislation also sets out specific requirements for the commencement of a TCO. According to the Act, a TCO is taken to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)). Consequently, TCO No. 0703431 is deemed to have commenced on 2 March 2007, the date on which the application was submitted by Joy Mining Machinery. This commencement date ensures that the rights of importers are beneficially affected from that date, allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force (paragraph 126(1)(r) of the Regulations).
In terms of potential consequences for breach, the Act does not specify any offences, penalties, or civil/criminal consequences for failure to comply with the TCO provisions. However, the rights of any person (other than the Commonwealth) as at the date of registration are not adversely affected, and no new liabilities are imposed on any person in respect of anything done or omitted before the date of registration. This means that while the TCO provides tariff concessions, it does not impose additional burdens or liabilities on any party, ensuring that the concessions are granted without causing disadvantage or additional obligations to those affected by the legislation.