EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808856
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.
Iluka (Eucla Basin) Pty Ltd applied for a TCO in respect of certain wet concentrator processing plant on 19 May 2008.
Instrument
TCO No 0808856 was made on 08 August 2008. It declares that those certain wet concentrator processing 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. 0808856 is taken to have come into force on 19 May 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, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The purpose of this Act is to provide relief from customs duty for certain goods that are not produced domestically, thus promoting the importation of these goods into Australia. Under section 269F of the Act, individuals may apply to the CEO for a TCO, which would apply a lower rate of customs duty to the specified goods, provided that the application meets certain criteria. This mechanism aims to support industries by reducing the cost of importing necessary goods and facilitating trade. The process involves ensuring that no substitutable goods are produced in Australia, as outlined in sections 269C and 269P of the Act. The TCO instrument, such as TCO No. 0808856 made on 08 August 2008, formalises the concession, allowing specific goods, like certain wet concentrator processing plants, to benefit from a reduced or free rate of duty, enhancing their affordability and availability in the domestic market.
Scope and Application
The Tariff Concession Instrument No. 0808856 under the Customs Act 1901 applies to specific goods, namely certain wet concentrator processing plants, which are eligible for a tariff concession order (TCO) granted by the Chief Executive Officer of Customs. This instrument is applicable to entities or individuals involved in the importation or production of these goods within Australia. The application process is governed by section 269F of the Act, which mandates that a TCO can only be applied for and granted if the goods do not fall under the exclusions specified in section 269SJ, and if no substitutable goods are produced in Australia. The instrument does not impose any disadvantages or liabilities on persons other than the Commonwealth and benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force on 19 May 2008. The application of this Act is national in scope, extending across all states and territories within Australia.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0808856 under the Customs Act 1901 (section 269F) allow for the application of tariff concession orders (TCO) for specific goods, provided they meet certain criteria. If the Chief Executive Officer of Customs (CEO) is satisfied that the application is valid and does not pertain to goods listed in section 269SJ, which are ineligible for a TCO, they must then determine if the application meets the core criteria (section 269C). This entails confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Once these criteria are met, the CEO is required to make a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties or entities it governs primarily concern the application process for TCOs. The CEO must ensure that any application for a TCO is assessed against the core criteria, which includes verifying that no substitutable goods were produced in Australia. This involves a thorough examination of production records and ensuring that the goods specified in the application do not have a locally produced alternative. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person to submit reasons why the TCO should not be made (subsection 269K(1)). These obligations are designed to ensure that tariff concessions are granted fairly and only when appropriate.
Any failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in civil or criminal consequences. However, the explanatory statement does not specify any particular offences, penalties, or consequences for breaches of the Act in the context of TCOs. It is important to note that the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person for actions taken before the TCO's registration. Importers, however, may benefit from the TCO by applying for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.