EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801685
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.
Cement Australia Holdings Pty Ltd applied for a TCO in respect of certain cement grinding plant on 30 January 2008.
Instrument
TCO No 0801685 was made on 4 April 2008. It declares that those certain cement grinding 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. 0801685 is taken to have come into force on 30 January 2008.
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. 0801685, enacted under the Customs Act 1901, was introduced to address the specific needs of industries seeking tariff relief for imported goods where no Australian-produced substitutes exist. The Act, which was passed by the Australian Parliament, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This initiative aims to support industries by reducing the cost of importing specific goods, thus promoting competition and potentially lowering consumer prices. The instrument in question, made on 4 April 2008, pertains to certain cement grinding plants and was designed to ensure these goods attract a free rate of duty, as no substitutable goods were being produced in Australia at the time of the application. This measure was implemented to avoid disadvantaging any person, including importers, and to facilitate a refund of duties paid on such goods imported since 30 January 2008.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the issuance of Tariff Concession Orders (TCOs) which provide for reduced customs duties on certain goods, as administered by the Chief Executive Officer of Customs (CEO). This legislation applies to entities such as businesses or individuals who seek to import specific goods that are not produced domestically and for which a lower rate of duty is sought. The Act covers the Commonwealth jurisdiction and applies to transactions involving the importation of goods specified in a TCO. It excludes goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The Act’s application can be extended or restricted through subordinate instruments, although no such extensions or restrictions are evident in this particular TCO. The Tariff Concession Instrument No. 0801685, which came into effect on 30 January 2008, pertains to cement grinding plants and effectively grants these goods a free duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). An application for a TCO can be submitted by any person, and if the CEO determines that the application is valid and not regarding goods specified in section 269SJ, the CEO must then assess whether the application meets the core criteria outlined in section 269C. The core criteria require that on the day the application 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, a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 will be issued, with the duty rate for these goods being free rather than the general rate of 5% (subsection 269P(3)).
The obligations under the Customs Act 1901 for the CEO include accepting a valid TCO application and assessing whether it meets the core criteria, as well as ensuring that a notice is published in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth in respect of anything done or omitted before the date of registration (subsection 269S(1)). Additionally, importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the TCO was taken to have come into force, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in civil or criminal consequences. For example, if an entity submits a false application for a TCO, it could be subject to penalties under section 283 of the Customs Act 1901, which includes a maximum penalty of 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate. Additionally, any person who makes a false or misleading statement in an application for a TCO could be subject to a maximum penalty of 10,000 penalty units under section 311 of the Crimes Act 1914. These penalties underscore the importance of adhering to the legislative requirements and obligations set forth in the Customs Act 1901 and related regulations.