EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825495
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.
Cp Mining applied for a TCO in respect of certain slurry pump on 07 August 2008.
Instrument
TCO No 0825495 was made on 24 October 2008. It declares that those certain slurry pump 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. 0825495 is taken to have come into force on 07 August 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. 0825495, enacted in 2008, is a component of the Customs Act 1901. This instrument was introduced to address the need for tariff concessions on specific goods, allowing for lower customs duty rates where applicable. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs and apply when certain criteria are met, specifically when no substitutable goods are produced in Australia. This concession aims to benefit importers by potentially reducing their duty liabilities and facilitating the importation of specific goods under more favourable tariff conditions.
The instrument was created following an application by Cp Mining for a TCO on certain slurry pumps, and after the CEO determined that no substitutable goods were produced in Australia, the TCO was issued. The TCO came into effect on the date the application was lodged, 7 August 2008, and no submissions were received in opposition to the TCO. The objective of this instrument aligns with the policy to streamline and support the importation process by providing tariff relief where appropriate, ultimately benefiting the importing community.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which the Chief Executive Officer of Customs may make. These orders apply to goods for which a lower rate of customs duty is granted, provided certain conditions are met. The Act applies to any person who applies for a TCO in respect of goods, with the condition that the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The application must meet the core criteria set out in the Act, notably that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order specifying the reduced duty rate applicable to the goods in question. For example, in the case of TCO No. 0825495, the CEO declared that certain slurry pumps were subject to a free duty rate instead of the general 5% duty, as no substitutable goods were produced in Australia. The application of the TCO is governed by national legislation, with the commencement date aligning with the date the application was lodged, and does not affect existing rights or impose new liabilities on any person.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0825495, pursuant to the Customs Act 1901, include sections 269C, 269B, 269D, 269E, 269F, 269P, 269SJ, and 269K. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods, provided that the goods are not those specified in section 269SJ, which are ineligible for a TCO. If the CEO determines that the application meets the core criteria, as outlined in section 269C, they must make a written order (TCO) declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per section 269P(3). Sections 269B, 269D, and 269E provide definitions relevant to the application process, including "goods produced in Australia", "ordinary course of business", and "substitutable goods".
The Act imposes certain obligations and requirements on the parties involved in the TCO process. The applicant, such as Cp Mining in this case, must ensure their application for a TCO is valid and meets the core criteria, which includes demonstrating that no substitutable goods are produced in Australia. The CEO must review the application and, if satisfied, make a written TCO within the stipulated timeframe. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K(1). In this instance, no submissions were received. Additionally, the TCO does not affect the rights of any person other than the Commonwealth, and it does not impose any liabilities on any person.
Breaching the provisions of the Customs Act 1901 or the associated regulations may result in various civil or criminal consequences. While the explanatory statement does not specify the exact penalties, under Australian law, breaches of customs legislation can lead to fines, imprisonment, or both, depending on the severity of the offence. For example, knowingly or recklessly making a false statement in a customs declaration can result in a fine of up to $22,000 or imprisonment for up to two years, or both, under section 130 of the Customs Act 1901. It is essential for all parties involved to comply with the requirements and obligations outlined in the legislation to avoid potential penalties.