EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719758
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.
BHP Billiton Olympic Dam Corporation Pty Ltd applied for a TCO in respect of certain gyrator crusher top shells on 21 November 2007.
Instrument
TCO No 0719758 was made on 1 February 2008. It declares that those certain gyrator crusher top shells 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. 0719758 is taken to have come into force on 21 November 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. 0719758, enacted under the Customs Act 1901, addresses the need for tariff concessions to be granted for specific goods where no substitutable products are produced in Australia. This legislation was introduced to provide a mechanism by which the Chief Executive Officer of Customs could make Tariff Concession Orders (TCOs) that apply lower rates of customs duty on certain goods. The policy objective is to ensure that Australian businesses can access imported goods at reduced costs when no domestic alternatives are available, thereby supporting competitiveness and economic efficiency. The instrument came into effect on 21 November 2007, the date the application was lodged, and does not affect the rights of any person prior to its enactment, while providing potential duty refunds to importers for goods imported since that date.
Scope and Application
The Customs Act 1901, as amended, governs the application and scope of Tariff Concession Orders (TCOs) under Part XVA, allowing for reduced customs duties on specified goods. This legislative framework applies to any entity or individual who applies for a concession under the Act, provided that the goods in question are not listed in section 269SJ, which identifies those goods that cannot be subject to a TCO. The Act mandates that the Chief Executive Officer of Customs must consider the core criteria set out in sections 269C, 269B, and 269D to determine eligibility for a TCO. The application process involves assessing whether there are any substitutable goods produced in Australia, with a focus on goods that are put, or are capable of being put, to a use corresponding with the goods in question. The TCO in question, number 0719758, pertains to specific gyrator crusher top shells and was approved following a determination by the CEO that no substitutable goods were produced in Australia, thus meeting the eligibility criteria. This order, which came into effect on 21 November 2007, allows for the importation of these goods at a free rate of duty, down from the general rate of 5%.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for Tariff Concession Orders (TCOs) under Part XVA. These orders, as specified in section 269F, can be applied for by a person and, if certain criteria are met, the Chief Executive Officer of Customs (the CEO) must make a written order. A TCO application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a TCO declaring that the goods are subject to a prescribed rate in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). For instance, in the case of BHP Billiton Olympic Dam Corporation Pty Ltd, a TCO was made on 1 February 2008, declaring that certain gyrator crusher top shells are subject to a free rate of duty, down from the general rate of 5%.
The obligations imposed by the Act on parties involved include the requirement for the CEO to assess the validity of a TCO application. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which cannot be subject to a TCO, and must verify that the core criteria are met. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO as at the date of registration (subsection 269S(1)).
Breaching the requirements or obligations set out in the Act may result in various consequences. The Act does not explicitly outline specific offences or penalties for non-compliance with the TCO provisions. However, general provisions within the Customs Act 1901 may apply to any violations, including fines and imprisonment. Importers 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, maintaining that the rights of importers will be beneficially affected.