EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804138
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 Services Ltd applied for a TCO in respect of certain ore handling and delivery system on 14 March 2008.
Instrument
TCO No 0804138 was made on 12 June 2008. It declares that those certain ore handling and delivery system 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. 0804138 is taken to have come into force on 14 March 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, enacted by the Australian Parliament, provides a framework for the regulation of imports and exports through customs duties and other measures. The Act was amended to introduce the scheme for Tariff Concession Orders (TCOs) under Part XVA, aiming to address the need for specific tariff concessions for certain imported goods that are not produced in Australia. This mechanism allows for the application of reduced or free customs duty rates on goods that are essential for Australian industries but are not manufactured domestically. The policy objective is to support the competitiveness of Australian businesses by reducing the cost of importing critical goods, thereby encouraging economic growth and efficiency. Tariff Concession Instrument No. 0804138, made on 12 June 2008, is an example of this legislative framework in action, providing a zero-rate duty on certain ore handling and delivery systems as applied from 14 March 2008.
Scope and Application
The Tariff Concession Instrument No. 0804138 under the Customs Act 1901 applies to goods specifically identified in the application made by Rio Tinto Services Ltd for a tariff concession order (TCO). The Act enables the Chief Executive Officer of Customs to grant a TCO, which provides for a reduced or free rate of customs duty on specified goods. This concession applies to goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as per the criteria outlined in the Act. The TCO applies to the geographic jurisdiction of Australia, impacting the importation of the specified goods nationwide. Notably, the instrument does not affect the rights of any person except the Commonwealth, ensuring that no pre-existing liabilities or disadvantages are imposed on any individual or entity due to the issuance of the TCO. The application of this legislation is further extended or restricted through the subordinate instruments of the Customs Tariff Act 1995, which details the specific tariff rates and conditions applicable to the goods under the TCO.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0804138 (F2008L02434) under the Customs Act 1901 involve the application and approval process for Tariff Concession Orders (TCOs) (s 269F, s 269C). An application for a TCO must be made to the Chief Executive Officer of Customs (CEO) by a person seeking a lower rate of customs duty on specified goods (s 269F). The CEO is then required to determine if the application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia at the time the application was lodged (s 269C). Once the CEO is satisfied that the application meets these criteria, a written order (TCO) is issued, declaring that the goods in question are subject to a prescribed rate of duty (s 269P(3)).
The obligations and requirements imposed by this Act on the parties involved are primarily procedural and conditional. The CEO has a duty to ensure that any TCO application is assessed against the core criteria specified in the Act (s 269C). This includes verifying that no substitutable goods were produced in Australia at the time the application was made (s 269C). Additionally, the CEO is mandated to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to lodge submissions if they believe the TCO should not be made (s 269K(1)). This transparency ensures that all relevant parties have an opportunity to voice their concerns or objections.
There are no explicit offences or penalties mentioned in the Act for the failure to comply with the requirements of a TCO. However, the Act does specify the consequences of a TCO for the parties involved. For instance, it stipulates that a TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (s 269S(1)). This ensures that the implementation of a TCO does not retroactively penalise or disadvantage any party. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force (s 126(1)(r) of the Regulations). This provision provides a clear benefit to those who import goods subject to a TCO.
The Tariff Concession Instrument No. 0804138 effectively establishes a framework for reducing customs duties on specific goods through Tariff Concession Orders, provided certain conditions are met. The Act outlines a structured process for application and approval, ensuring that the concessions are granted fairly and transparently. While the Act does not specify penalties for non-compliance, it ensures that the implementation of a TCO does not disadvantage or impose liabilities on any party, thereby maintaining fairness and legal certainty in the application process.