EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0809064
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.
Hamersley Iron Pty Ltd applied for a TCO in respect of certain electrical cables on 21 May 2008.
Instrument
TCO No 0809064 was made on 8 August 2008. It declares that those certain electrical cables 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. 0809064 is taken to have come into force on 21 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, addresses the issue of providing tariff concessions for certain goods by enabling the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). This mechanism ensures that lower rates of customs duty are applied to specific goods that meet the criteria for tariff concessions. The act allows for a streamlined process whereby an applicant can request a TCO for goods that are not specified as ineligible under section 269SJ and which meet the core criteria outlined in section 269C, primarily ensuring that no substitutable goods are produced in Australia. The policy objective is to support industries by reducing the cost of imported goods, thus promoting competitiveness and economic efficiency. The Tariff Concession Instrument No. 0809064, made on 8 August 2008, exemplifies this process by granting Hamersley Iron Pty Ltd a concession for certain electrical cables, effectively reducing the duty on these goods from 5% to free. The implementation of this instrument aligns with the legislative intent to facilitate economic benefits for businesses through reduced import costs.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a mechanism through which Tariff Concession Orders (TCOs) can be implemented by the Chief Executive Officer of Customs (CEO). This Act applies to individuals and entities that seek to import goods that are not produced in Australia and are not of a type specified in section 269SJ of the Act, which precludes certain goods from being eligible for a TCO. The application of this Act is national in scope, falling under the Commonwealth jurisdiction, and it extends to all goods imported into Australia that meet the criteria for a TCO. The Act mandates that if the CEO determines an application meets the core criteria — notably, that no substitutable goods are produced in Australia in the ordinary course of business — a TCO must be issued, granting a concession on the customs duty rate for the specified goods. The TCO does not retroactively affect the rights of any person or impose any liabilities for actions taken prior to its registration, ensuring that its application is forward-looking. Hamersley Iron Pty Ltd’s application for a TCO concerning certain electrical cables, which was granted on 8 August 2008, exemplifies the process and the benefit it provides to importers who can now import these goods duty-free, provided they were imported after the effective date of the application, 21 May 2008.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0809064, made under the Customs Act 1901, pertain to the application and approval of Tariff Concession Orders (TCOs). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for TCOs in respect of goods. If the CEO determines that the application meets the core criteria set out in sections 269C and 269P, a written order declaring the goods to which the concession applies is issued. For Hamersley Iron Pty Ltd's application concerning certain electrical cables, the CEO found that no substitutable goods were produced in Australia, thus satisfying the criteria (section 269C), and a TCO was issued on 8 August 2008, applying item 50 of Schedule 4 to the Customs Tariff Act 1995 with a duty rate of free, as opposed to the general rate of 5% (section 269P).
The Act imposes specific obligations and requirements on both applicants and the CEO. An applicant, such as Hamersley Iron Pty Ltd, must ensure their application adheres to the stipulations under section 269F and is not for goods specified in section 269SJ, which cannot be subject to a TCO. The CEO, on the other hand, must promptly assess the application against the core criteria and, if satisfied, issue a written TCO. Furthermore, under section 269K, the CEO is obligated to publish a notice in the Gazette inviting submissions on the application, although no submissions were received for this particular TCO.
Breaches of the provisions or obligations under the Customs Act 1901 can result in both civil and criminal consequences. For example, if a party fails to comply with the requirements for applying for a TCO or if there is fraudulent application, penalties may be imposed. The maximum penalties for offences under the Customs Act 1901 can include substantial fines and, in severe cases, imprisonment. For civil breaches, penalties may involve financial compensation or other remedies. The specifics of these penalties are detailed in the relevant sections of the Customs Act 1901 and associated regulations. Hamersley Iron Pty Ltd’s compliance with these provisions ensures the legitimacy of the TCO and avoids any legal repercussions.