EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900935
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.
Citic Pacific Mining Management Pty Ltd applied for a TCO in respect of certain prefabricated buildings on 14 January 2009.
Instrument
TCO No 0900935 was made on 14 April 2009. It declares that those certain prefabricated buildings 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. 0900935 is taken to have come into force on 14 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, enacted by the Parliament of Australia, establishes a framework for the administration of customs duties, including the possibility of tariff concessions on certain goods. The Act allows for the creation of Tariff Concession Orders (TCOs) which reduce the customs duty on specified goods, provided certain criteria are met. One such order, Tariff Concession Instrument No. 0900935, was made in 2009 to address a specific application by Citic Pacific Mining Management Pty Ltd for a TCO concerning certain prefabricated buildings. The policy objective of this order was to ensure that the goods, which have no substitutable Australian-produced alternatives, would be subject to a reduced rate of duty, thereby encouraging their importation and use. This legislative instrument was designed to facilitate the importation of these goods without imposing any additional liabilities or disadvantaging existing rights of other parties, while benefiting importers by potentially allowing them to claim refunds on duties paid prior to the TCO's effective date.
Scope and Application
The Customs Act 1901, under Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking to import goods that may benefit from a lower rate of customs duty if a TCO is granted. The application process is outlined in the Act, requiring applicants to demonstrate that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs, and that the goods are not substitutable by any produced in Australia under the ordinary course of business as defined in sections 269D and 269E. If the CEO is satisfied with the application, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. The CEO is also mandated to publish a notice in the Gazette, inviting submissions from interested parties; however, if no submissions are received, the TCO can proceed. The TCO No. 0900935, made on 14 April 2009, applies to certain prefabricated buildings, granting them a duty-free status under item 50 of Schedule 4 to the Tariff, effective from the date of the application on 14 January 2009.
Key Provisions
The primary operative sections of this legislation, specifically sections 269C, 269F, 269K, and 269P, establish the framework for applying for and making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, which are defined in section 269C, and if satisfied, make a written order (a TCO) specifying the applicable tariff item from the Customs Tariff Act 1995 (section 269P(3)). Upon acceptance of a valid application, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties (section 269K(1)). In the case of TCO No. 0900935, the CEO accepted the application from Citic Pacific Mining Management Pty Ltd on 14 January 2009 and made the order on 14 April 2009, declaring that the prefabricated buildings were subject to a tariff rate of free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must rigorously evaluate whether the application for a TCO meets the core criteria, specifically that no substitutable goods are produced in Australia at the time of application. This evaluation includes considering the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" as provided in sections 269D, 269E, and 269F respectively. The CEO must also publish a notice in the Gazette promptly after accepting an application, inviting any interested parties to lodge submissions. Importers, as beneficiaries of the TCO, are required to apply for a refund of duty on goods imported since the TCO is deemed to have come into force, pursuant to paragraph 126(1)(r) of the Regulations.
The legislation does not explicitly outline specific offences, penalties, or consequences for breaches in the text provided. However, the Act generally implies that non-compliance with the terms and conditions of a TCO could lead to various legal consequences, including but not limited to, financial penalties, enforcement actions, or revocation of the TCO. The maximum penalties for breaches of the Customs Act 1901 can vary significantly depending on the nature and severity of the breach, but they may include substantial fines and potential imprisonment for serious offences. The Customs Act and associated regulations must be consulted for detailed information on penalties for specific breaches.