EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902311
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.
Bradken Resources Pty Ltd applied for a TCO in respect of certain foundry equipment on 22 January 2009.
Instrument
TCO No 0902311 was made on 17 April 2009. It declares that those certain foundry equipment 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. 0902311 is taken to have come into force on 22 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. 0902311 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain goods, enabling a reduction in customs duty. This legislation was introduced to provide relief to specific industries by allowing lower rates of customs duty on goods that are not produced domestically in the ordinary course of business. The instrument was enacted by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders based on applications under section 269F of the Act. The underlying policy objective is to facilitate economic efficiency and competitiveness by reducing the cost of importing specific goods that are not readily available locally.
The Tariff Concession Instrument No. 0902311, which came into force on 22 January 2009, specifically applies to certain foundry equipment, reducing their customs duty rate from 5% to free. This measure was implemented following an application by Bradken Resources Pty Ltd and after no objections were raised during the public consultation period. The instrument ensures that it does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities, while benefiting importers who can apply for duty refunds on goods imported since the effective date.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is set, contingent upon certain criteria being met by the applicant. Specifically, the Act applies to entities or individuals who apply for tariff concessions in respect of goods not specified under section 269SJ, which outlines goods that cannot be subject to a TCO. The application process requires that, on the date of application, no substitutable goods are being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. This jurisdictional reach extends across Australia, impacting both individuals and entities engaged in importing the specified goods. The Act does not specify exclusions or exemptions beyond those outlined in section 269SJ, and it does not impose any liabilities on persons other than the Commonwealth. The application of the Act may be further extended or clarified through subordinate instruments, such as regulations or notifications, although the primary legislation itself does not specify these in detail.
Key Provisions
The main operative sections of this legislation (sections 269C, 269P(3), and 269K(1)) provide a framework for the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901. These sections outline the criteria that must be met for an application to be considered valid and detail the process for granting and publishing a TCO. Specifically, section 269C specifies that a TCO application is valid if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. In this case, the CEO did not receive any submissions opposing the TCO for certain foundry equipment applied for by Bradken Resources Pty Ltd.
The obligations and requirements imposed by this Act on the parties it governs are primarily centred on the application and approval processes for TCOs. The CEO of Customs must ensure that all applications for TCOs are assessed against the criteria specified in section 269C. If an application meets these criteria, the CEO is obligated to issue a written TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting an application, inviting any interested parties to submit any objections. Once the TCO is issued, it must be registered, and its effects are deemed to have commenced on the date the application was lodged. Importantly, the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose any new liabilities.
Any breaches of the requirements set out in this Act may lead to legal consequences. While the explanatory statement does not explicitly list offences, penalties, or specific civil or criminal consequences, the failure to comply with the mandated processes could potentially lead to legal challenges or administrative penalties. For instance, if the CEO fails to properly assess an application against the criteria in section 269C or neglects to publish a notice in the Gazette as required by section 269K(1), this could result in the TCO being contested in court, leading to potential financial or reputational harm. However, the exact nature and extent of these consequences would depend on further legislative provisions or judicial interpretations.