EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843234
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 Pty Ltd applied for a TCO in respect of certain cooling tower fanstacks on 09 December 2008.
Instrument
TCO No 0843234 was made on 06 March 2009. It declares that those certain cooling tower fanstacks 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. 0843234 is taken to have come into force on 09 December 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. 0843234, enacted in 2009, is part of the Customs Act 1901 and was introduced to address the issue of providing tariff concessions for specific goods not produced in Australia. The Customs Act 1901 established a framework under which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty on certain goods. The CEO must ensure that these applications meet the core criteria set out in the Act, such as verifying that no substitutable goods are produced in Australia. Rio Tinto Aluminium Pty Ltd applied for a TCO concerning certain cooling tower fanstacks, which were granted as no substitutable goods were being produced in Australia at the time of the application. This instrument does not disadvantage any person or impose liabilities except for the Commonwealth and allows for refunds of duty to importers of the specified goods.
The Instrument was developed following the submission of an application by Rio Tinto Aluminium Pty Ltd and after the CEO published a notice in the Gazette inviting public submissions. No submissions were received in response to the notice. The Tariff Concession Order came into effect on the date the application was lodged, 09 December 2008, without affecting the rights of any person other than the Commonwealth, thereby ensuring that the rights of importers are beneficially impacted.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process for Tariff Concession Orders (TCO) which can be made by the Chief Executive Officer of Customs. These orders apply to goods specified in an application where the applicant demonstrates that the goods are not substitutable by any goods produced in Australia in the ordinary course of business. Such orders result in a lower rate of customs duty for the specified goods. The TCO mechanism is available to any person who meets the criteria set out in the Act and ensures that no substitutable goods are produced domestically for the goods in question. The geographical reach of this legislation is national, applying across Australia as it pertains to the federal customs duties and tariff concessions. However, certain goods, as specified in section 269SJ, are excluded from the scope of TCOs. The Act may be extended or restricted through subordinate instruments, although the primary legislation itself does not detail any specific exclusions beyond those mentioned. The commencement of a TCO is deemed to occur on the date the application is lodged, and it does not retroactively affect the rights or impose liabilities on any person for actions taken before the registration date of the order.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0843234 under the Customs Act 1901 involve the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows an application for a TCO to be made by a person, and if the CEO is satisfied that the application is valid, they must determine whether it meets the core criteria outlined in section 269C. If the application meets these criteria, the CEO must issue a written TCO, declaring the goods to which the concession applies (section 269P(3)). In this case, the TCO No. 0843234, made on 06 March 2009, applies to certain cooling tower fanstacks, declaring that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, instead of the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily directed towards the CEO and the applicant. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. They must also determine if the application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Once a TCO is issued, the CEO must also publish a notice in the Gazette, inviting submissions from any interested parties (subsection 269K(1)). The applicant, on the other hand, must ensure their application is valid and meets the core criteria.
Failure to comply with the provisions of the Customs Act 1901, including the making of false statements in an application for a TCO, can result in civil or criminal consequences. The Act does not specify maximum penalties for breaches of TCO provisions, but penalties for other offences under the Customs Act can include substantial fines and imprisonment. For example, section 236 of the Act provides that any person who knowingly makes a false statement in an application for a permit or licence can be fined up to 5,000 penalty units or imprisoned for up to five years, or both. This suggests that similar penalties may apply to breaches related to TCOs. Additionally, there may be consequences under other related legislation, such as the Crimes Act 1914, which imposes penalties for offences including fraud and false statements.