EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811920
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.
Citic Pacific Mining Management Pty Ltd applied for a TCO in respect of certain concentrator plant on 10 June 2008.
Instrument
TCO No 0811920 was made on 15 August 2008. It declares that those certain concentrator 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. 0811920 is taken to have come into force on 10 June 2008
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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. 0811920, enacted in 2008, amends the Customs Act 1901 to address the issue of tariff concessions for specific goods that are not produced in Australia and for which no substitutable goods exist domestically. This instrument was introduced by the Chief Executive Officer of Customs under section 269F of the Act in response to an application by Citic Pacific Mining Management Pty Ltd for a Tariff Concession Order (TCO) regarding certain concentrator plant. The objective is to ensure that the application meets the core criteria specified in section 269C of the Act, whereby no substitutable goods are produced in Australia on the day the application was lodged. The instrument declares that the certain concentrator plant are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with a general duty rate of 5% being reduced to free duty for these goods. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, while potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO took effect.
Scope and Application
The Tariff Concession Instrument No. 0811920, made under the Customs Act 1901, applies to goods specified in the instrument, in this case, certain concentrator plant, and it is designed to provide a concession on customs duty for these goods. The application of the instrument is limited to the entity that applied for it, namely Citic Pacific Mining Management Pty Ltd, and it does not affect the rights of any other person as at the date of registration. The instrument extends to the Commonwealth and operates within the federal jurisdiction of Australia. The instrument does not impose any liabilities on any person and benefits the rights of importers who can apply for a refund of duty on goods imported since the day the instrument is taken to have come into force. The instrument’s application is not subject to exclusions or exemptions as per the Act, and it does not extend or restrict its application through subordinate instruments.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) No. 0811920, made under section 269P(3) of the Customs Act 1901, declare that certain concentrator plant is subject to a concessionary rate of customs duty (section 269P(3)). These particular goods, which are specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, are now subject to a rate of duty of free, as opposed to the general rate of duty of 5%. This concession applies to goods that are imported into Australia from the date on which the TCO was taken to have come into force, which is 10 June 2008 (subsection 269S(1)).
The obligations imposed on the parties governed by this TCO are primarily on the Chief Executive Officer of Customs (CEO) and the applicant, Citic Pacific Mining Management Pty Ltd. The CEO must ensure that the application for a TCO meets the core criteria outlined in sections 269C and 269D of the Act, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Upon satisfying these criteria, the CEO must make a written order (section 269P(3)). Citic Pacific Mining Management Pty Ltd must apply for the TCO in a manner consistent with the provisions of the Customs Act 1901, ensuring all required information and evidence are provided to substantiate the application.
Breaching the conditions of this TCO or misrepresenting information in the application process can lead to serious consequences. Under the Customs Act 1901, any person who knowingly or recklessly makes a false statement or representation in an application for a TCO may be subject to civil or criminal penalties. Specifically, a person who knowingly or recklessly makes such a false statement may be liable for a penalty of up to 10,000 penalty units or imprisonment for up to two years, or both, under section 278 of the Act. Furthermore, if the false statement leads to an unlawful benefit or gain, the person may face additional criminal charges and penalties.
The TCO does not disadvantage any person or impose liabilities on any person except the Commonwealth, as per subsection 269T(2) of the Act. However, it does confer benefits to importers, who can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. Any party aggrieved by the decision of the CEO to grant or refuse a TCO may seek review under the Administrative Appeals Tribunal Act 1975.