EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0810189
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.
Rio Tinto Aluminium applied for a TCO in respect of certain bulkhead flange seals on 27 May 2008.
Instrument
TCO No 0810189 was made on 15 August 2008. It declares that those certain bulkhead flange seals 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. 0810189 is taken to have come into force on 27 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 regulation of customs and excise duties, among other things. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can result in lower customs duties for certain imported goods. This legislative provision addresses the problem of ensuring that certain critical goods can be imported at a reduced tariff rate when they are not produced domestically, thereby supporting industries that rely on imported materials. The explanatory statement for Tariff Concession Instrument No. 0810189, issued on 15 August 2008, exemplifies this process, where Rio Tinto Aluminium successfully applied for a TCO for specific bulkhead flange seals, resulting in a zero duty rate for these goods, which otherwise would have been subject to a 5% duty. This instrument came into effect on the date of the application, 27 May 2008, and no submissions opposing the TCO were received by the CEO.
Scope and Application
The Tariff Concession Instrument No. 0810189 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been sought and approved by the Chief Executive Officer of Customs. This instrument was implemented in response to an application by Rio Tinto Aluminium concerning certain bulkhead flange seals, and it came into force on 27 May 2008, the date on which the application was lodged. The instrument grants a concession by reducing the customs duty on these specific goods from a general rate of 5% to free, provided that no substitutable goods are produced in Australia. The scope of the Act includes any entity or individual applying for a TCO in respect of goods not specified under section 269SJ, which excludes certain goods from being subject to a TCO. The Act operates on a national level within Australia and is subject to the provisions of the Customs Tariff Act 1995. The instrument does not disadvantage any person or impose liabilities on anyone for actions taken before the TCO was registered, and it does not affect pre-existing rights except to beneficially impact importers who can now apply for duty refunds. The application and effect of the TCO can be extended or specified further through subordinate instruments.
Key Provisions
The key operative sections of this legislation (sections 269C, 269B, 269E, and 269P(3)) establish the criteria for the Chief Executive Officer (CEO) of Customs to assess Tariff Concession Orders (TCOs). Specifically, section 269C states that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies that 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are defined by sections 269D, 269E, and 269F respectively. Finally, section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person can apply to the CEO for a TCO in respect of goods (section 269F). The CEO must assess whether the application meets the core criteria, ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). Additionally, the CEO must make a written order if they are satisfied that the TCO application meets the core criteria (subsection 269P(3)).
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for breaching the provisions related to TCOs. However, general legal principles would apply, and any failure to comply with the Act or its regulations could potentially lead to civil or criminal liability depending on the nature and severity of the breach. For instance, wilful contravention of the Act or its regulations could lead to fines or imprisonment as per the relevant provisions of the Customs Act or other applicable legislation. The specific penalties would depend on the nature and severity of the breach, and could be pursued under relevant criminal or civil law provisions.