EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843786
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.
Boyne Smelters applied for a TCO in respect of certain Alumina Handling Machinery on 11 December 2008.
Instrument
TCO No 0843786 was made on 06 March 2009. It declares that those certain Alumina Handling Machinery 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. 0843786 is taken to have come into force on 11 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties, including the ability to grant tariff concession orders (TCOs) to reduce customs duties on certain goods. The problem this legislation addresses is the potential economic disadvantage faced by businesses that need to import specific goods for which there are no Australian-made alternatives, as high tariffs could increase costs and reduce competitiveness. The policy objective of this specific instrument, TCO No. 0843786, is to alleviate the financial burden on businesses by providing tariff concessions, thereby making imported goods more affordable and potentially fostering economic growth by reducing the cost of essential machinery and materials. The instrument was made on 6 March 2009, effective from 11 December 2008, and does not disadvantage any person or impose any new liabilities beyond what is specified under the Customs Act and related regulations.
Scope and Application
The Customs Act 1901, as amended through Instrument No. 0843786, provides a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that apply lower rates of customs duty to specified goods. This particular instrument pertains to certain Alumina Handling Machinery, for which the general rate of duty is 5% but is reduced to free under the terms of this TCO. The application of this Act extends to any individual or entity seeking a tariff concession for goods imported into Australia, provided that the goods do not fall within the exclusions specified in section 269SJ of the Act. The TCO applies to the particular machinery specified in the instrument, and the geographic reach is national, as it pertains to goods imported into Australia. The Act does not disadvantage any person or impose liabilities on any person other than the Commonwealth in respect of actions taken prior to the registration of the TCO. The Act's provisions are not subject to further extension or restriction through subordinate instruments beyond what is specified in the primary legislation and the instrument itself.
Key Provisions
The main operative sections of this legislation, found in Part XVA of the Customs Act 1901, focus on the process and criteria for making Tariff Concession Orders (TCOs). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B further defines terms such as "goods produced in Australia" and "ordinary course of business," while section 269D and 269E provide the meanings for these terms. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)).
The Act imposes specific obligations and requirements on both the CEO and applicants for TCOs. The CEO must determine whether an application meets the core criteria by assessing whether no substitutable goods were produced in Australia at the time of application. If the criteria are met, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). After evaluating any submissions, the CEO must make a written TCO if the application meets the criteria. Applicants, on the other hand, must ensure that their applications are valid and meet the core criteria, particularly by demonstrating that no substitutable goods were produced in Australia at the time of application.
Breaches of the provisions outlined in the Customs Act 1901 and the associated regulations can lead to various civil and criminal consequences. Under subsection 269T(1), any person who contravenes a provision of the Customs Act 1901, including the sections governing TCOs, can face a penalty. The maximum penalty for individuals is generally outlined in section 283 of the Act, which stipulates that an individual can be fined up to 10,000 penalty units or imprisonment for up to 10 years, or both, for serious offences. For corporations, the penalties can be significantly higher, with fines up to 50,000 penalty units as outlined in section 284. These penalties underscore the importance of complying with the Act's requirements and the potential severe repercussions for non-compliance.