EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716881
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.
Rio Tinto applied for a TCO in respect of certain drum filling line packing machine on 4 October 2007.
Instrument
TCO No 0716881 was made on 21 December 2007. It declares that those certain drum filling line packing machine 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. 0716881 is taken to have come into force on 4 October 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 Order No. 0716881, enacted under the Customs Act 1901, was introduced to address a specific issue regarding the imposition of customs duties on certain imported goods. This legislation was designed to offer tariff concessions on particular goods, thereby reducing the customs duty payable on those goods if certain conditions are met. The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs), which can be applied for by individuals or entities and approved by the Chief Executive Officer of Customs (CEO) if the goods in question are not specified as ineligible under section 269SJ and meet the core criteria outlined in section 269C. The policy objective of this instrument is to provide relief by lowering the duty rate on specified goods to zero, thereby promoting trade and reducing costs for importers of these goods. This approach aims to support economic activities by making imported goods more affordable, thus encouraging their use and integration into the domestic market.
Scope and Application
The Tariff Concession Instrument No. 0716881, issued under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain drum filling line packing machines, which are subject to a tariff concession order (TCO) initiated by Rio Tinto. This instrument was made by the Chief Executive Officer of Customs (the CEO) after determining that no substitutable goods were produced in Australia on the day the application was lodged, fulfilling the core criteria set out in section 269C of the Act. The geographic reach of this legislation is national, as it pertains to goods entering Australia and is administered under the Commonwealth's purview. The instrument does not affect the rights of any person, except to the benefit of importers who can now apply for a refund of duty on goods imported since the day the TCO was taken to have come into force. Any exclusions or exemptions are implicitly defined by the conditions for TCO applications, particularly the non-production of substitutable goods in Australia. The Act may be further extended or restricted through subordinate instruments, which can provide additional details or amendments to the tariff concessions.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269K, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. The CEO must then decide whether the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269D and section 269E). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to a prescribed lower rate of duty as specified in Schedule 4 to the Customs Tariff Act 1995. Furthermore, subsection 269K(1) of the Act mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made.
The Act imposes several obligations on the parties involved. The CEO must rigorously assess each TCO application to ensure it meets the core criteria, particularly verifying that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. Additionally, upon receiving a valid application, the CEO is obligated to publish a notice in the Gazette, inviting submissions from any interested parties. The CEO must then consider these submissions before making a final decision on the TCO application.
Breach of the provisions set out in the Customs Act 1901 may lead to various civil and criminal consequences. While the specific offences, penalties, or consequences for breach are not detailed in the explanatory statement, it is understood that the Act provides for enforcement mechanisms to ensure compliance. For instance, if a party fails to adhere to the requirements for a TCO application or submits false information, they may face legal action. The penalties for such breaches could include fines or other sanctions as determined by the relevant courts. The Act’s overarching intent is to regulate the customs duty process fairly and transparently, ensuring that the concessions are granted only when appropriate criteria are met.