EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900688
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 Limited applied for a TCO in respect of certain steam generation parts on 13 January 2009.
Instrument
TCO No 0900688 was made on 03 April 2009. It declares that those certain steam generation parts 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. 0900688 is taken to have come into force on 13 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 Customs Act 1901 was enacted to provide a framework for the administration of customs and excise duties in Australia. This legislation establishes the process for making Tariff Concession Orders (TCOs) under which a lower rate of customs duty applies to specified goods. The Tariff Concession Instrument No. 0900688 was introduced to address the application by Rio Tinto Aluminium Limited for tariff concessions on certain steam generation parts, ensuring that these goods are subject to a reduced customs duty rate. The instrument was enacted by the Chief Executive Officer of Customs (CEO) following the satisfaction of core criteria as outlined in section 269C of the Act, specifically that no substitutable goods were produced in Australia at the time of application. The objective of this concession is to provide economic benefits to importers by reducing the duty on these particular goods from the general rate of 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0900688 applies to the goods specified in the instrument, namely certain steam generation parts, and is administered under the Customs Act 1901. This Act provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods where no substitutable goods are produced in Australia in the ordinary course of business. The application of the TCO, in this case made on behalf of Rio Tinto Aluminium Limited, is effective from 13 January 2009, the date the application was lodged. The instrument does not disadvantage any person by affecting their rights or imposing liabilities for actions taken before the registration of the TCO, although it does provide beneficial rights to importers who can apply for a refund of duty on goods imported since the effective date. The geographic scope of this legislation is national, as it pertains to the importation of goods into Australia and the application of customs duties as set out in the Customs Act 1901 and the Customs Tariff Act 1995. Any exclusions or exemptions are determined by the specific criteria outlined in the Customs Act 1901, with the CEO required to consider these when deciding on the validity of a TCO application.
Key Provisions
The key operative sections of this legislation concern the creation and implementation of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Specifically, section 269F outlines the process for applying for a TCO, while section 269C sets out the core criteria that must be satisfied for the CEO to approve such an application. Section 269P(3) then mandates that if these criteria are met, the CEO must issue a written order, the TCO itself, which specifies the applicable duty rate for the goods in question.
Entities and individuals subject to the Act must adhere to several obligations and requirements. Firstly, any person seeking a TCO must ensure their application is not for goods specified in section 269SJ, which are ineligible for tariff concessions. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties if they consider the TCO should not proceed (subsection 269K(1)). The CEO must then review any submissions received before making a decision on the application.
Breach of the conditions outlined in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not explicitly detail offences, penalties, or consequences for non-compliance, it is reasonable to infer that failure to adhere to the statutory requirements could result in legal actions under the Act. Given the structured nature of the legislation, penalties might include fines or other civil remedies as stipulated by relevant laws. For instance, if an entity incorrectly claims tariff concessions, they could face financial penalties or be required to pay back duties owed, along with potential interest.
The explanatory statement does not specify maximum penalties, but such details are typically found in the relevant sections of the Customs Act 1901 and associated regulations. For example, under the Customs Act, penalties for non-compliance can vary widely depending on the severity and intent of the breach, potentially including substantial fines and imprisonment for serious or repeated offences. It is crucial for entities to ensure full compliance with the Act to avoid these potential repercussions.