EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901177
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 Alumina Plant on 15 January 2009.
Instrument
TCO No 0901177 was made on 14 April 2009. It declares that those certain Alumina Plant 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. 0901177 is taken to have come into force on 15 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 for the administration of customs and excise duties in Australia. This Act was introduced to address the need for a structured framework that facilitates the regulation of goods entering and leaving the country, ensuring efficient collection of applicable duties and taxes. The instrument, Tariff Concession Instrument No. 0901177, was enacted by the Chief Executive Officer of Customs under section 269F of the Customs Act 1901. It aims to provide tariff concessions on certain goods, specifically addressing the application by Rio Tinto Aluminium Limited for a Tariff Concession Order (TCO) on certain Alumina Plant, which was accepted on 15 January 2009. The policy objective of this concession is to ensure that no substitutable goods were produced in Australia at the time of application, thereby reducing the customs duty rate from the general 5% to free of charge for the specified goods. This instrument was published in the Gazette, inviting any objections which none were received, thus allowing the TCO to come into effect from the date of application.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders are intended to apply a lower rate of customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. A TCO application meets the core criteria if the CEO is satisfied that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The instrument applies to entities or individuals who wish to import specific goods and benefit from reduced customs duty rates, contingent on the conditions outlined in the Act being met. The application of TCOs is national in scope, affecting all importers of the specified goods within Australia. There are no stated exclusions or exemptions within the text, although the application is contingent on the goods not being substitutable by Australian-produced alternatives. The Act allows for the extension of its application through subordinate instruments, but this specific TCO does not impose any liabilities and does not affect the rights of any person other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0901177 under the Customs Act 1901 (the Act) provides a framework for the reduction of customs duty on certain goods, specifically Alumina Plant in this instance. Pursuant to section 269F of the Act, an application for a Tariff Concession Order (TCO) was made by Rio Tinto Aluminium Limited on 15 January 2009. If the Chief Executive Officer (CEO) of Customs is satisfied that the application is not in respect of goods specified in section 269SJ of the Act and meets the core criteria outlined in section 269C, a TCO is issued. The TCO in question declares that certain Alumina Plant are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting a tariff concession reducing the duty from the general rate of 5% to free.
Under the Act, the CEO has obligations to consider applications for TCOs and ensure that they meet the core criteria, specifically verifying that no substitutable goods are produced in Australia at the time the application is lodged. This is defined in section 269C, which incorporates definitions from sections 269D and 269E. If these criteria are met, the CEO is required to make a written order (section 269P(3)). For TCO No. 0901177, the CEO was satisfied that no substitutable goods were being produced in Australia, leading to the issuance of the order on 14 April 2009. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties. In this case, no submissions were received.
The Act imposes certain requirements and obligations on the parties involved. The CEO must ensure that any TCO application is valid and meets the criteria outlined in the Act. Importers and other relevant parties must comply with the terms of the TCO when importing the specified goods. Notably, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any new liabilities on any person. Importers of the specified goods will benefit from the tariff concession and may apply for a refund of duty on goods imported since the TCO is taken to have come into force on 15 January 2009.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can result in legal consequences. Although specific offences and penalties related to TCOs are not detailed in the explanatory statement, breaches of the Customs Act generally can lead to both civil and criminal penalties. Civil penalties can include fines up to a significant amount, while criminal penalties can include imprisonment and/or fines, depending on the severity and nature of the breach. The exact penalties are specified in other sections of the Act and would be determined by the courts in the event of a breach.