EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0810322
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.
Mcc Mining Pty Ltd applied for a TCO in respect of certain batching and mixing plant on 28 May 2008.
Instrument
TCO No 0810322 was made on 15 August 2008. It declares that those certain batching and mixing 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. 0810322 is taken to have come into force on 28 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 Tariff Concession Instrument No. 0810322, enacted in 2008, is an instrument under the Customs Act 1901 designed to provide relief on customs duties for certain goods. Specifically, this instrument was introduced to address the need for tariff concessions for particular goods, in this case, batching and mixing plant, where no substitutable goods were being produced in Australia at the time of the application. The instrument was initiated by an application from Mcc Mining Pty Ltd, which sought a tariff concession order (TCO) to apply a reduced customs duty rate of zero percent for the specified plant, down from the general rate of five percent. The instrument was made by the Chief Executive Officer of Customs, in line with the legislative framework set out in Part XVA of the Customs Act 1901, and was effective from the date the application was lodged, 28 May 2008. The instrument aims to provide economic benefits to importers without imposing any new liabilities or disadvantaging existing rights holders.
Scope and Application
The Tariff Concession Instrument No. 0810322 under the Customs Act 1901 applies to individuals and entities that wish to import certain batching and mixing plant by providing them with a lower rate of customs duty if specific criteria are met. The Act specifically pertains to goods that are subject to Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs, provided that the goods do not fall under the categories excluded by section 269SJ of the Act. The geographic reach of this legislation is national, as it applies across Australia. The application for a TCO must meet the core criteria outlined in the Act, primarily that no substitutable goods are produced in Australia at the time of application, as stipulated in section 269C. The TCO in question became effective on the date the application was lodged, which was 28 May 2008, and no submissions were received in opposition to the order. The TCO does not retroactively affect any rights or impose any liabilities on individuals or entities other than the Commonwealth, ensuring that the rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The primary sections of this legislation, namely sections 269F, 269C, 269B, 269D, 269E, and 269P(3) of the Customs Act 1901, outline the process by which Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs (CEO). An applicant can submit a request for a TCO if the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. The CEO must then evaluate whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia on the application date (section 269C). Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P(3) respectively. If the CEO determines that the application meets the criteria, they are required to issue a written TCO, specifying the applicable item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Customs Act 1901 imposes several obligations on both the CEO and applicants for TCOs. For the CEO, this includes accepting valid applications, ensuring that no substitutable goods were produced in Australia on the date of application, and publishing a notice in the Gazette inviting any interested parties to submit reasons against the TCO (subsection 269K(1)). The CEO must also consider any submissions received and make a decision accordingly. Applicants, on the other hand, must ensure their applications are complete and meet the eligibility criteria as outlined in the Act. They are also required to respond to any invitations to submit information or arguments against their application.
Breaches of the provisions under the Customs Act 1901 can result in various penalties and consequences. While the specific penalties for non-compliance with TCOs are not detailed in the explanatory statement, general penalties for breaches of the Customs Act can include fines and, in severe cases, imprisonment. For instance, under section 238 of the Customs Act 1901, an individual can be fined up to $22,000 or imprisonment for up to two years, or both, for offences related to customs duty evasion or non-compliance with customs regulations. Additionally, failure to comply with TCOs or the Act could result in civil consequences, such as the loss of eligibility for duty refunds or other benefits associated with the TCO.