EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901573
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 Limited applied for a TCO in respect of certain alumina distribution on 19 January 2009.
Instrument
TCO No 0901573 was made on 14 April 2009. It declares that those certain alumina distribution 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. 0901573 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0901573, enacted in 2009 under the Customs Act 1901, aims to facilitate tariff concessions for specific goods by reducing or eliminating customs duties, thereby addressing the need for a streamlined process to provide relief on certain imported goods. This instrument was introduced by the Chief Executive Officer of Customs, following an application from Boyne Smelters Limited for tariff concessions on certain alumina distribution on 19 January 2009. The objective is to ensure that no substitutable goods are produced in Australia, allowing the application to meet the core criteria as stipulated in section 269C of the Act. The instrument became effective on the day the application was lodged, without affecting any pre-existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0901573, applies to entities seeking tariff concessions on imported goods. Specifically, the Act enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) to entities, such as Boyne Smelters Limited in this case, that apply for concessions on certain goods. The Act applies to goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in the core criteria. The TCO applies to the specific goods identified in the instrument, namely certain alumina distribution, and alters the applicable customs duty rate from 5% to free, contingent on the CEO's satisfaction that no substitutable goods were produced domestically. The instrument is applicable across the Commonwealth of Australia and does not impose any liabilities on any person except the Commonwealth. The application process includes a mandatory publication in the Gazette inviting submissions, although in this instance, no submissions were received. The TCO comes into effect on the date the application is lodged, providing benefits to importers who can apply for duty refunds on goods imported from the effective date of the TCO.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0901573 pertain to the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269F), the criteria for such orders (section 269C), and the application of the concessional duty rates as specified in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). A TCO application must satisfy the core criteria, primarily that no substitutable goods are produced in Australia (section 269C), with specific definitions provided for terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' (sections 269D, 269E, and 269F respectively). If the Chief Executive Officer of Customs (CEO) is satisfied with the application, they must make a written order, declaring that the specified goods are subject to the prescribed tariff concession (section 269P(3)).
The Customs Act 1901 imposes several obligations on parties involved with TCOs. Firstly, applicants such as Boyne Smelters Limited must submit a valid application to the CEO, ensuring it complies with the criteria outlined in the Act. The CEO, upon receiving the application, must publish a notice in the Gazette inviting submissions from interested parties and consider any submissions received (subsection 269K(1)). If no submissions are received or if the CEO is satisfied with the application, they must proceed to make a written TCO. The TCO is deemed to have come into force on the date the application was lodged (subsection 269S(1)). The Act also mandates that TCOs do not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's registration date, though it may beneficially affect the rights of importers (subsection 269S(1)).
In terms of breaches and consequences, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with TCO provisions. However, general legal principles apply, and any non-compliance with the Act could potentially lead to legal actions or penalties as prescribed under other relevant sections of the Act. For example, if an entity provides false information in an application, it could face penalties under sections dealing with fraudulent behaviour or misrepresentation in other parts of the Customs Act 1901. Additionally, the Commissioner of the Australian Customs and Border Protection Service can take enforcement actions against any breaches of the Act, which may include fines or other penalties as determined by the court.