EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808970
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 mineral separation plant on 20 May 2008.
Instrument
TCO No 0808970 was made on 18 August 2008. It declares that those certain mineral separation 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. 0808970 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 was enacted to provide a framework for the regulation of customs and border control in Australia, including the imposition of customs duties on imported goods. To address specific economic or policy needs, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower or eliminate customs duties on certain goods under certain conditions. The Tariff Concession Instrument No. 0808970, enacted in 2008, was introduced to provide tariff concessions for particular mineral separation plant, recognising that no substitutable goods were produced in Australia at the time of the application. This instrument was designed to benefit the importer of these goods by allowing them to apply for a refund of any duty paid on imports of the specified plant since the TCO was taken to have come into force on 20 May 2008. The process involved publishing a notice in the Gazette inviting submissions from any interested parties, none of which were received, thereby allowing the CEO to proceed with the tariff concession as per the statutory requirements.
Scope and Application
The Tariff Concession Instrument No. 0808970, made under the Customs Act 1901, applies to the concession of customs duty rates for certain mineral separation plant, specifically those applied for by Iluka Resources Limited on 20 May 2008. The instrument was enacted to provide a tariff concession order (TCO) which declares that the specified mineral separation plant are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively applying a duty rate of free, down from the general rate of 5%. This concession applies to the Commonwealth of Australia and affects entities involved in the importation of the specified goods, particularly importers who stand to benefit from potential duty refunds for goods imported since the effective date of the TCO, which is the date of the application, 20 May 2008. The Act does not disadvantage any person or impose liabilities on any person except the Commonwealth, ensuring that pre-registration actions are not impacted. The geographic reach of the legislation is national, applicable across all states and territories in Australia. The legislation does not specify any exclusions, exemptions, or thresholds other than those inherently defined within the Customs Act 1901 and related regulations.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act), as relevant to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269K, and 269S. Section 269F allows for the application to the Chief Executive Officer of Customs (the CEO) for a TCO concerning specific goods. If the CEO is satisfied that the application is valid, they must then assess whether it meets the core criteria outlined in section 269C. This core criteria evaluation ensures that no substitutable goods were produced in Australia on the date the application was lodged. If these criteria are met, the CEO must issue a written TCO, as per section 269P(3), which specifies the applicable customs duty rate for the goods.
The Act imposes several obligations on the parties involved. Firstly, section 269K requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must invite any interested parties to submit any submissions they may have regarding the TCO. This ensures transparency and provides a mechanism for public input. In the case of TCO No. 0808970, the CEO did not receive any submissions. Additionally, the Act ensures that a TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the TCO's effective date.
In terms of enforcement, the Act does not explicitly outline specific offences or penalties for non-compliance with the TCO provisions. However, general legal consequences may arise if the terms of the TCO are violated. For instance, if a party fails to comply with the duty rates specified in the TCO, they could potentially face civil or criminal penalties under broader customs legislation. Although the explanatory statement does not detail specific penalties, breaches of customs regulations typically result in fines or imprisonment under the Customs Act. It is essential to consult the broader regulatory framework for more precise information on enforcement and penalties.