EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844825
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 high pressure compressors on 22 December 2008.
Instrument
TCO No 0844825 was made on 13 March 2009. It declares that those certain high pressure compressors 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. 0844825 is taken to have come into force on 22 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. 0844825, enacted in 2009, amends the Customs Act 1901 to provide tariff concessions for certain high pressure compressors, thereby addressing the gap in the application of customs duty for specific imported goods. This instrument was introduced to facilitate trade by reducing the customs duty on these goods, which are critical for certain industrial applications. The instrument was created under the authority of the Chief Executive Officer of Customs, who is mandated by section 269F of the Act to consider applications for Tariff Concession Orders. The objective of this legislative measure is to ensure that no substitutable goods are produced in Australia, thereby justifying the tariff concession under section 269C of the Act. The instrument came into effect on the date the application was lodged, 22 December 2008, without affecting the rights of any person prior to its registration.
Scope and Application
The Tariff Concession Instrument No. 0844825 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO) for the purposes of providing a lower rate of customs duty. This Act pertains to entities such as Rio Tinto Aluminium that apply for such orders. The Act operates on a national level within Australia, as it falls under the Commonwealth jurisdiction. The scope of the Act includes the review of applications for TCOs to ensure that they meet the core criteria, which necessitates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act further details the meaning of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Notably, this legislation does not apply to goods specified in section 269SJ of the Act and may extend its application through subordinate instruments. The CEO is required to publish a notice of the TCO application in the Gazette to invite submissions from interested parties, although no submissions were received for this particular TCO.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269B, 269P, 269K, and 269S) establish the framework for making Tariff Concession Orders (TCOs) under the Customs Act 1901. These sections detail the conditions that must be satisfied for a TCO to be made, including the requirement that no substitutable goods are produced in Australia at the time the application is made (section 269C). Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are crucial in determining whether an application meets the core criteria. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written TCO (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties (section 269K(1)), although in this case, no submissions were received. The TCO is deemed to come into force on the day the application was lodged (section 269S(1)), in this instance, 22 December 2008.
The obligations imposed by the Act on the CEO and other parties include ensuring that the application for a TCO is valid and meets the core criteria specified in section 269C. The CEO must also publish a notice in the Gazette and consider any submissions received in response to that notice. In this case, the CEO made the TCO No. 0844825 on 13 March 2009, declaring that certain high-pressure compressors are subject to a free rate of duty instead of the general rate of 5%. Importers of these goods can apply for a refund of duty paid on imports since the TCO came into force, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations may result in penalties. While the specific penalties for breach are not detailed in the provided text, under Australian law, breaches of customs regulations can result in both civil and criminal penalties. Civil penalties may include fines and other monetary penalties, while criminal penalties can include imprisonment, reflecting the severity of the breach. The exact penalties would depend on the nature and extent of the breach, as well as any relevant legislation and case law.