EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831636
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 alumina process pumps on 18 September 2008.
Instrument
TCO No 0831636 was made on 05 December 2008. It declares that those certain alumina process pumps 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. 0831636 is taken to have come into force on 18 September 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, as supplemented by Tariff Concession Instrument No. 0831636, was enacted to facilitate tariff concessions for certain imported goods that do not have Australian-made equivalents. This instrument was introduced to address the specific needs of businesses that rely on importing particular goods essential for their operations but for which no local substitute is available. The instrument, enacted by the Australian government, aims to provide economic relief by reducing the customs duty on these goods, thereby potentially lowering production costs and enhancing competitiveness for businesses like Rio Tinto Aluminium, who applied for the concession concerning certain alumina process pumps. The policy objective is to support industries that are reliant on imported components by mitigating the financial burden of customs duties, ultimately contributing to the broader economic objectives of the country.
The Tariff Concession Instrument No. 0831636 was issued following an application by Rio Tinto Aluminium for a tariff concession on alumina process pumps, which was approved as no substitutable goods were being produced in Australia. This instrument effectively lowers the duty on these specified pumps from the general rate of 5% to free, providing a direct financial benefit to importers of these goods. The instrument was subject to a consultation period as required by the Customs Act, though no objections were received, facilitating its swift implementation. The concession took effect from the date of the application, 18 September 2008, without retroactively affecting any pre-existing rights or imposing new liabilities on parties other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any person or entity that may apply for a TCO in respect of goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application process is triggered when a person applies to the CEO for a TCO, and the CEO evaluates whether the application meets the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. The geographic reach of the Act is national, as it is a Commonwealth statute. The Act does not specify exclusions beyond those goods listed in section 269SJ. Subordinate instruments may extend or restrict the application of the Act by providing further details on the criteria for TCOs or specifying additional goods that cannot be subject to a TCO. The commencement of a TCO is deemed to be the day on which the application is lodged, as per subsection 269S(1) of the Act.
Key Provisions
The main operative sections of this legislation, specifically within Part XVA of the Customs Act 1901, focus on the process and criteria for the creation of Tariff Concession Orders (TCOs). Section 269F outlines the application process for a TCO, whereby a person may apply to the Chief Executive Officer (CEO) of Customs for a tariff concession. The CEO must then determine if the application meets the core criteria as outlined in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per section 269P(3).
Entities and individuals governed by this Act have specific obligations and requirements. For example, applicants for a TCO must ensure their application meets the core criteria, particularly demonstrating that no substitutable goods were produced in Australia on the application date. The CEO has the responsibility to assess applications against these criteria and to publish notices in the Gazette inviting submissions from any interested parties. Additionally, the CEO must consider any submissions received and decide whether to proceed with making the TCO.
Breaches of the provisions outlined in this legislation may lead to civil or criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, under Australian law, breaches of customs regulations generally can result in significant penalties. For instance, knowingly making a false statement in an application for a TCO could be considered a criminal offence, potentially leading to fines or imprisonment, depending on the severity of the breach. Civil penalties might include fines for non-compliance or failure to adhere to the specified procedures. The exact penalties would be determined based on the specific nature of the breach and the applicable laws at the time.