EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812463
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 gas turbine embedments structural steel parts on 12 June 2008.
Instrument
TCO No 0812463 was made on 01 September 2008. It declares that those certain gas turbine embedments structural steel parts 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. 0812463 is taken to have come into force on 12 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. 0812463, enacted in 2008, is an instrument made under the Customs Act 1901. This legislation addresses the need for tariff concessions to be granted for certain imported goods that do not have Australian-made alternatives, thereby promoting fair trade practices and potentially stimulating local production in the future by reducing the tariff burden on importers. The instrument was created by the Chief Executive Officer of Customs, pursuant to section 269F of the Customs Act 1901, and it was made to meet the core criteria specified under section 269C of the Act. The policy objective, as outlined in the explanatory statement, is to ensure that no substitutable goods are produced in Australia when a tariff concession order is considered, thereby facilitating the import of necessary goods without imposing an undue tariff burden.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. These orders are applicable to any person or entity that has made an application under section 269F of the Act for goods that do not fall under the restricted category specified in section 269SJ, and meet the core criteria outlined in sections 269C, 269B, and 269D of the Act. The scope of this legislation is national, as it is a Commonwealth Act, and applies across all states and territories of Australia. The application process involves a thorough review to ensure that the goods in question are not substitutable by any products already being manufactured domestically, as per section 269C, and that such goods are not those restricted by section 269SJ. Once a TCO is issued, it becomes effective from the date the application was lodged, as stipulated in subsection 269S(1) of the Act. The application and issuance of a TCO do not retroactively affect any pre-existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0812463, involve the creation of Tariff Concession Orders (TCOs) through section 269F (2) and the criteria for these orders as outlined in sections 269C, 269B, and 269D. Section 269F allows an applicant to request a TCO for certain goods, while section 269C specifies that a TCO application meets core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Sections 269B and 269D further define the terms used in these criteria, such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Once the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must issue a TCO, as per section 269P(3), which applies a lower rate of duty to the specified goods.
The Act imposes several obligations on the parties involved. For the applicant, it requires that they submit an application to the CEO, ensuring that the goods in question do not fall under the prohibited categories specified in section 269SJ. The CEO, on the other hand, has the responsibility to review the application, assess whether it meets the core criteria outlined in section 269C, and if satisfied, make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1). Importers, once the TCO is in effect, have the right to apply for a refund of any duty paid on the specified goods imported since the TCO came into force, as stipulated in paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements set forth in the Customs Act 1901 can result in various consequences. While the explanatory statement does not explicitly detail specific offences or penalties for breaches related to TCOs, the broader Customs Act includes provisions for penalties and enforcement measures. Generally, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The exact penalties are determined by the specific provisions of the Customs Act and the nature of the violation. It is important for all parties involved to adhere to the Act's requirements to avoid any adverse legal consequences.