EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802723
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.
Sunstate Cement Ltd applied for a TCO in respect of certain cement mill on 08 April 2008.
Instrument
TCO No 0802723 was made on 04 July 2008. It declares that those certain cement mills 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. 0802723 is taken to have come into force on 08 April 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 Customs Act 1901 was enacted to regulate customs duties and facilitate international trade. A significant aspect of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duties on specific goods. This scheme was introduced to address the need for economic incentives and support for certain industries by reducing the cost of imported goods. The instrument F2008L02805, known as Tariff Concession Instrument No. 0802723, was created to grant a TCO for certain cement mills, allowing these goods to be subject to a lower rate of customs duty. The instrument was enacted by the Chief Executive Officer of Customs in accordance with section 269F of the Customs Act 1901, following an application by Sunstate Cement Ltd. The policy objective behind this specific TCO was to ensure that no substitutable goods were produced in Australia at the time of the application, thus justifying the concession under section 269C of the Act. The instrument came into effect on the date the application was lodged, 08 April 2008, and does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0802723, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain cement mills. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to goods, provided that certain criteria are met. For the cement mills in question, the application for a TCO was successful because no substitutable goods were produced in Australia on the date the application was lodged. The instrument, which came into effect on 8 April 2008, exempts these particular cement mills from the general rate of duty, which is 5%, and instead subjects them to a duty-free rate. The TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities. This legislation, extending its application through subordinate instruments, is specifically tailored to influence the customs duty applicable to the specified goods, facilitating trade and potentially benefiting importers by allowing them to apply for refunds on duties paid before the instrument's effective date.
Key Provisions
The Tariff Concession Instrument No. 0802723 under the Customs Act 1901 introduces tariff concessions for specific goods, as outlined in sections 269F, 269C, 269B, and 269P(3) (section 269F, 269C, 269B, 269P(3)). This legislation allows for a lower rate of customs duty to be applied to certain goods, provided that an application for a Tariff Concession Order (TCO) is made to the Chief Executive Officer (CEO) of Customs and the application meets specific core criteria. In this case, Sunstate Cement Ltd applied for a TCO in respect of certain cement mills on 08 April 2008, and the CEO determined that a TCO should be issued because no substitutable goods were being produced in Australia on the date the application was lodged. The TCO, numbered 0802723, was issued on 04 July 2008 and specifies that the goods in question are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a free rate of duty instead of the general 5% rate.
The obligations imposed by this Act on the parties involved are primarily centred around the application process and the CEO's decision-making criteria. When an application for a TCO is made, the CEO must ensure that the application meets the core criteria set out in section 269C, which involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Section 269K(1) also requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit their views on whether the TCO should be made. This process ensures that all relevant parties have the opportunity to provide input before the CEO makes a decision. Additionally, once the TCO is issued, it does not affect any existing rights or liabilities of individuals or entities other than the Commonwealth, as stipulated in subsection 269S(1).
In terms of potential breaches and the associated penalties, the Customs Act 1901 does not explicitly detail specific offences, penalties, or civil/criminal consequences for non-compliance with the provisions of a TCO. However, the Act does provide a framework for the imposition of duties and penalties in other contexts. For instance, under section 126 of the Regulations, there are provisions for the refund of duty to importers of goods that are subject to a TCO. Any failure to comply with the terms of a TCO, or any other provision of the Customs Act 1901, could potentially lead to civil or criminal penalties as outlined in other sections of the Act, although these are not explicitly mentioned in relation to TCOs. It is important for all parties involved to adhere to the requirements and obligations set out in the Act to avoid any potential legal ramifications.