EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811644
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 rougher scavenger flotation plant on 06 June 2008.
Instrument
TCO No 0811644 was made on 15 August 2008. It declares that those certain rougher scavenger flotation 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. 0811644 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 Customs Act 1901, enacted by the Australian Parliament, established a legislative framework for customs duties, including provisions for Tariff Concession Orders (TCOs). These orders allow for the application of lower rates of customs duty on certain goods, provided specific criteria are met. The Tariff Concession Instrument No. 0811644, introduced under this Act, specifically addresses the need to grant tariff concessions for goods that are not produced domestically and do not have substitutable alternatives. The objective is to support industries by reducing the cost of importing certain goods, thereby making them more competitive in the Australian market. The Instrument was made on 15 August 2008, following an application by Moly Metals Australia Pty Ltd for tariff concessions on certain rougher scavenger flotation plant, and it came into effect from 6 June 2008. The application of this TCO provides a duty-free rate on the specified plant, benefiting importers by potentially qualifying them for duty refunds on imports made since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0811644, established under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO). The Act provides a framework for the Chief Executive Officer of Customs (CEO) to grant TCOs, which reduce the rate of customs duty on particular goods. This mechanism is available to any person who applies for a TCO concerning goods that are not listed in section 269SJ of the Act, which specifies goods that are ineligible for tariff concessions. The process involves determining whether no substitutable goods are produced in Australia at the time of application, as defined by sections 269C, 269D, and 269E of the Act. The application of this legislation is national in scope, affecting all entities and individuals involved in the importation of the specified goods within Australia. Importantly, the TCO does not impose new liabilities on any person and does not affect the rights of any person adversely regarding actions taken before its registration. This instrument extends the primary Act through subordinate legislation, allowing for specific tariff concessions to be applied as needed.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0811644 under the Customs Act 1901 focus on the application and approval process for Tariff Concession Orders (TCOs). Section 269F of the Act allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while section 269C specifies that such an application meets core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. 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 the TCO applies, as per the relevant item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must apply to the CEO, ensuring their application adheres to the criteria outlined in section 269C. Once an application is accepted, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must then consider these submissions before making a decision. For Moly Metals Australia Pty Ltd, this involved applying for a TCO for certain rougher scavenger flotation plant on 6 June 2008, which the CEO approved after verifying that no substitutable goods were produced in Australia.
Failure to comply with the requirements of the Customs Act 1901 can lead to various consequences. The Act does not specify particular offences under the TCO itself but breaches of customs regulations generally can incur penalties. Offences under the Customs Act can result in civil penalties, including fines, and criminal penalties such as imprisonment, depending on the severity of the breach. For example, knowingly making a false statement or representation in an application for a TCO could lead to substantial fines and even imprisonment, as outlined in relevant sections of the Customs Act. The specific penalties are not detailed in the explanatory statement but generally align with those set out in the Act and associated regulations.