EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709589
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.
Bradken Resources Pty Ltd applied for a TCO in respect of certain iron ore car parts on 21 June 2007.
Instrument
TCO No 0709589 was made on 7 September 2007. It declares that those certain iron ore car 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. 0709589 is taken to have come into force on 21 June 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 Tariff Concession Instrument No. 0709589 was enacted in 2007 as an amendment under the Customs Act 1901, which governs the application of customs duties and related tariffs on imported goods in Australia. This instrument addresses the gap in tariff concessions for specific goods, allowing for reduced customs duty rates on goods that meet certain criteria. The instrument was introduced to provide tariff relief to industries where Australian-made alternatives are not readily available, thus supporting local industries and potentially enhancing competitiveness without unduly burdening importers with higher duties. The instrument was enacted by the Chief Executive Officer of Customs, as authorised under section 269F of the Act, following an application by Bradken Resources Pty Ltd for tariff concessions on certain iron ore car parts. The primary policy objective of this instrument is to facilitate the import of goods that cannot be readily replaced by Australian-made products, thereby benefiting importers and maintaining the economic balance in specific sectors.
Scope and Application
The Tariff Concession Instrument No. 0709589 under the Customs Act 1901 applies to Bradken Resources Pty Ltd, specifically concerning certain iron ore car parts, and mandates a lower rate of customs duty for these goods. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, provided the application meets core criteria, notably that no substitutable goods were produced in Australia at the time of the application. The TCO reduces the general duty rate from 5% to 0% for the specified goods, effective from the date the application was lodged. The application of this Act is limited to the Commonwealth jurisdiction, and it does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument does not disadvantage or impose liabilities on any person other than the Commonwealth, and it notably benefits importers by allowing them to apply for a refund of duty paid on these goods since the TCO's effective date.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0709589 under the Customs Act 1901 establish the process by which Tariff Concession Orders (TCOs) are made and applied (section 269C). The instrument specifically addresses the application by Bradken Resources Pty Ltd for a TCO in respect of certain iron ore car parts (section 269F). The core criteria for a TCO are outlined in section 269C, requiring that no substitutable goods were produced in Australia on the day the application was lodged. This is further defined by sections 269D, 269E, and 269P(3), which clarify what constitutes goods produced in Australia, the ordinary course of business, and substitutable goods, respectively. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written TCO order (section 269P(3)).
The obligations imposed by the Act on the parties involved primarily concern the CEO of Customs. The CEO must accept a TCO application as valid and determine whether it meets the core criteria (section 269C). If the application does meet the criteria, the CEO must make a TCO (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). Furthermore, the Act specifies that the TCO comes into force on the day the application is lodged (subsection 269S(1)).
In terms of penalties and consequences, the Act does not explicitly state civil or criminal penalties for failing to comply with the provisions regarding TCOs. However, the general legal framework under which the Customs Act operates may include penalties for non-compliance with customs regulations. For instance, breaches of customs regulations can lead to fines or other penalties as determined by the court, but these are not detailed in the explanatory statement for this specific instrument.
The TCO itself does not affect the rights of any person as at the date of registration in a way that disadvantages that person or imposes liabilities for actions taken prior to the registration (subsection 269S(2)). Instead, the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). The Act ensures that the TCO does not impose any liabilities on any person, thereby protecting stakeholders from unintended burdens.