EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808969
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 Resources Limited applied for a TCO in respect of certain concentrator plant on 20 May 2008.
Instrument
TCO No 0808969 was made on 18 August 2008. It declares that those certain concentrator plant 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. 0808969 is taken to have come into force on 20 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, provides a framework for the administration of customs and excise through the application of duties, taxes, and other charges. The Act was introduced to regulate and facilitate international trade, ensuring that the importation of goods into Australia is managed efficiently and fairly. One of the mechanisms under this Act is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods, provided specific criteria are met. This is particularly relevant in cases where the goods in question are not produced domestically or where such concessions are necessary to support industry competitiveness and economic growth. The explanatory statement for Tariff Concession Instrument No. 0808969, made on 18 August 2008, details an application by Iluka Resources Limited for a TCO concerning certain concentrator plant, which was granted due to the absence of substitutable goods produced in Australia. This instrument, effective from 20 May 2008, aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the date the TCO came into force, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These TCOs apply to goods specified in the order, granting them a reduced rate of customs duty as stipulated in Schedule 4 of the Customs Tariff Act 1995. An application for a TCO can be submitted by any person to the CEO, provided the goods do not fall under the category specified in section 269SJ of the Act, which lists goods ineligible for a TCO. The CEO must assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO's decision to grant a TCO is published in the Gazette, inviting objections; however, in the case of Tariff Concession Order No. 0808969, no objections were received. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, although it does provide benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0808969 (referred to as TCO No. 0808969) are outlined in sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not those specified in section 269SJ which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria, as defined in section 269C, the CEO must make a TCO (section 269P). The TCO declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as specified in the order. In this case, the TCO No. 0808969 applies to certain concentrator plant, granting them a duty-free status under item 50 of Schedule 4, effective from 20 May 2008.
The Act imposes several obligations on the parties involved. The CEO is required to consider each TCO application and determine if it meets the core criteria set out in section 269C. If satisfied, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this instance, no submissions were received, and the CEO proceeded to make the TCO (subsection 269K(1)). The rights of importers are positively affected as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the provisions of the Customs Act 1901 can result in civil or criminal penalties. While the explanatory statement does not specify the exact penalties, breaches of the Customs Act can typically result in fines and, in some cases, imprisonment. The severity of the penalties would depend on the nature and extent of the breach. Importers who fail to comply with the refund provisions under the Regulations could also face civil consequences such as financial penalties or the need to repatriate the goods. However, the explanatory statement does not detail these potential penalties.