EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839795
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 steam generation boiler expansion joints on 14 November 2008.
Instrument
TCO No 0839795 was made on 30 January 2009. It declares that those certain steam generation boiler expansion joints 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. 0839795 is taken to have come into force on 30 January 2009.
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. 0839795, enacted in 2009 under the Customs Act 1901, aims to address the problem of imposing excessive customs duties on certain goods that cannot be substituted by Australian-produced alternatives. This legislation was introduced to facilitate the importation of specific goods by reducing or eliminating customs duty for these items, thereby supporting economic efficiency and competitiveness. The instrument was developed by the Chief Executive Officer of Customs (CEO) following a valid application by Rio Tinto Aluminium, and it was enacted by the Australian Government. The policy objective behind this instrument is to ensure that the importation of goods which cannot be reasonably produced within Australia benefits from tariff concessions, thereby alleviating the financial burden on importers and potentially lowering costs for consumers.
The CEO, upon receiving an application for a Tariff Concession Order (TCO) and determining that the application meets the core criteria under the Customs Act 1901, is mandated to make a written order declaring that the specified goods are subject to a reduced or free customs duty rate. In this instance, the CEO was satisfied that no substitutable goods for the steam generation boiler expansion joints were produced in Australia, leading to the issuance of TCO No. 0839795. This TCO, which came into effect on 30 January 2009, ensures that importers of these goods are not disadvantaged by retroactive application of the duty changes, while also providing them with the potential to apply for a refund of duties paid prior to the TCO's effective date.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 0839795, applies to entities seeking tariff concessions for goods that are not produced in Australia and for which no substitutable goods are manufactured domestically. This legislation specifically pertains to the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Act. The application procedure is initiated by an entity such as Rio Tinto Aluminium, which must demonstrate that the goods in question are not produced in Australia and that there are no substitutable goods capable of being put to a similar use. The Chief Executive Officer of Customs is responsible for assessing these applications against the core criteria set out in the Act, particularly under sections 269C and 269SJ, which define the conditions under which tariff concessions can be granted. The application of this Act is national in scope, covering the entire Commonwealth of Australia, and it extends its reach to all entities seeking tariff concessions for specified goods. However, the Act explicitly excludes certain goods from being subject to a TCO, as detailed in section 269SJ, ensuring that the concessions do not apply to these specified items. The TCO itself, once made, applies retroactively from the date the application was lodged, thereby benefiting importers who can claim refunds for duties paid on these goods since the effective date of the concession.
Key Provisions
The Tariff Concession Instrument No. 0839795, made under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) for certain steam generation boiler expansion joints, which were applied for by Rio Tinto Aluminium on 14 November 2008. This instrument was issued on 30 January 2009, and it declares that these specific steam generation boiler expansion joints are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995. This TCO results in a tariff concession, reducing the general duty rate from 5% to free of charge for these goods.
Sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901 outline the criteria for approving a TCO application. The CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged, and that the goods do not fall under the restricted category outlined in section 269SJ. If these criteria are met, the CEO must issue a written order as a TCO.
The Act imposes several obligations on the CEO. After accepting a TCO application as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). For this particular TCO, no submissions were received in response to the notice. Additionally, the Act mandates that the TCO comes into force on the day the application was lodged, which for TCO No. 0839795 was 30 January 2009. The TCO does not affect any pre-existing rights of persons, except it allows importers to apply for a duty refund on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
Under the Customs Act 1901, any failure to comply with the provisions of the Act regarding TCOs can result in civil and criminal consequences. While the specific offences and penalties are not detailed in the Explanatory Statement, it is implied that any non-compliance could lead to legal action, potentially including fines or other penalties as stipulated by the Act. The precise penalties would depend on the nature and severity of the breach.