EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811643
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.
Moly Metals Australia Pty Ltd applied for a TCO in respect of certain cleaner and concentrate filtration plant on 06 June 2008.
Instrument
TCO No 0811643 was made on 15 August 2008. It declares that those certain cleaner and concentrate filtration 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. 0811643 is taken to have come into force on 06 June 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. 0811643 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was introduced to provide relief to Australian importers by reducing or eliminating customs duties on particular goods, thereby making them more competitively priced and accessible. The instrument was created by the Chief Executive Officer of Customs (CEO), following an application by Moly Metals Australia Pty Ltd for tariff concessions on cleaner and concentrate filtration plant. The primary objective of this legislation is to provide a streamlined process for reducing customs duties on goods that are not produced in Australia, thereby encouraging imports and supporting domestic industries that rely on these inputs.
The instrument was brought into force on 6 June 2008, the date the application was lodged. The CEO was required to consult the public and did so by publishing a notice in the Gazette, inviting any objections to the tariff concession. No submissions were received, leading to the issuance of the TCO on 15 August 2008. This concession benefits importers by allowing them to claim refunds on duties paid on the specified goods since the effective date of the TCO, without imposing any new liabilities or disadvantaging existing stakeholders.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals and entities seeking to import specific goods into Australia, provided these goods meet the core criteria outlined in the Act. The application process involves an assessment by the CEO to determine if the imported goods in question are substitutable by domestically produced goods, and if not, whether they qualify for tariff concessions. Notably, the legislation specifies certain goods that cannot be subject to a TCO, as outlined in section 269SJ of the Act. The TCO applies nationally, affecting all imports of the designated goods into Australia. Once a TCO is issued, it retroactively applies from the date the application was lodged, benefiting importers by potentially allowing them to claim refunds on duties paid prior to the TCO’s effective date. Importantly, the TCO does not impose any new liabilities on individuals or entities and does not disadvantage anyone in relation to actions taken before the TCO was registered.
Key Provisions
The main operative sections of the Customs Act 1901, particularly relevant to Tariff Concession Orders (TCOs), include section 269F (subsections 269C, 269B, 269D, 269E, and 269P(3)) which outline the process for applying for and receiving a TCO. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the application is not for goods specified in section 269SJ. The CEO must then determine if the application meets the core criteria, primarily established by 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. If satisfied, the CEO must make a written order, a TCO, specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Under the Act, the obligations of the parties involved are clear. The CEO of Customs is responsible for evaluating TCO applications against the core criteria set out in the Act. This involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the application date. If the criteria are met, the CEO must issue a TCO, which declares that the specified goods are subject to a reduced rate of customs duty. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. The absence of any submissions generally signifies that the CEO can proceed with the TCO.
Any breaches of the provisions regarding the application and issuance of TCOs can lead to civil or criminal consequences. The Act does not explicitly detail penalties for failure to comply with the TCO provisions; however, breaches of the Customs Act generally can result in fines or imprisonment. For example, under section 245 of the Customs Act, a person who knowingly makes a false or misleading statement in a customs document can be subject to a fine of up to $22,200 for an individual or $111,000 for a corporation. Additionally, section 237A of the Act imposes penalties for contraventions of the Act, which can include fines up to $22,200 for individuals and $111,000 for corporations, or imprisonment for up to two years, or both. These penalties underscore the importance of compliance with the legislative requirements around TCOs.