EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0805489
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.
MacMahon Mining Services Pty Ltd applied for a TCO in respect of certain alloy steel raise drill rods on 28 April 2008.
Instrument
TCO No 0805489 was made on 18 July 2008. It declares that those certain alloy steel raise drill rods 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. 0805489 is taken to have come into force on 28 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 facilitate international trade by regulating the import and export of goods into and out of Australia. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 0805489, enacted in 2008, applies this mechanism to certain alloy steel raise drill rods by MacMahon Mining Services Pty Ltd, reducing the duty rate from the general 5% to free. This legislative action aims to alleviate the financial burden on businesses by ensuring that they are not unfairly taxed on goods that are not produced domestically and for which no suitable Australian-made alternatives exist. The instrument was developed following an application by the company and was subjected to public consultation, with no objections received. It took effect on the date of application, 28 April 2008, and does not disadvantage any existing parties or impose new liabilities.
Scope and Application
The Customs Act 1901 applies to any individual or entity involved in the import or export of goods in Australia, particularly concerning the application of customs duties. The Act authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce the duty on specific goods, provided no substitutable goods are produced in Australia in the ordinary course of business. This instrument is used to facilitate trade by lowering the duty on certain imported goods, thereby benefiting importers by reducing their costs. The TCO applies nationally, affecting all entities involved in the importation of the specified goods. However, it does not affect the rights of any person in relation to events that occurred before the order was registered, nor does it impose any new liabilities. The TCO does not apply to goods specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. Any broader application or restriction of the Act's provisions may be specified through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0805489 under the Customs Act 1901 provides a mechanism for applying lower rates of customs duty on certain goods. Section 269F (1) of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning specific goods. If the application is not for goods specified in section 269SJ, which are ineligible for a TCO, the CEO assesses whether the application meets the core criteria outlined in section 269C. Specifically, the CEO must determine if no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D (goods produced in Australia), 269E (ordinary course of business), and 269D (substitutable goods).
The obligations imposed by the Act on the parties involved primarily revolve around the application and assessment process for TCOs. The applicant must ensure that their application is valid and that the goods in question are eligible under the Act. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid (subsection 269K(1)). This notice serves as a public announcement and an opportunity for objections. If no submissions are received, the CEO proceeds with making the TCO, as seen in the case of MacMahon Mining Services Pty Ltd’s application for certain alloy steel raise drill rods, which was declared under item 50 of Schedule 4 to the Tariff, with a duty rate of free, down from the general rate of 5%.
The Act also outlines potential consequences for non-compliance or breach of its provisions. Although the explanatory statement does not specify detailed penalties for breaches related to TCOs, general provisions under the Customs Act 1901 include both civil and criminal penalties for various infractions. Civil penalties can include fines, and in more severe cases, criminal penalties may apply, potentially leading to imprisonment, depending on the nature and severity of the offence. The specific penalties would be determined based on the relevant sections of the Act and associated regulations.