EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904682
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.
Lynas Corporation applied for a TCO in respect of certain ore concentrate thickening and filtration plant on 11 February 2009.
Instrument
TCO No 0904682 was made on 08 May 2009. It declares that those certain ore concentrate thickening and filtration 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. 0904682 is taken to have come into force on 11 February 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 by the Parliament of Australia to provide a framework for the regulation of customs and excise duties. One of the mechanisms within this Act is the Tariff Concession Order (TCO) scheme, introduced to facilitate the concession of tariff rates on certain imported goods under specific conditions. This scheme allows the Chief Executive Officer of Customs to apply reduced customs duty rates on goods that meet particular criteria, thereby promoting economic efficiency and facilitating the import of necessary goods where there are no suitable Australian-made alternatives. Instrument No. 0904682 under this Act, made on 8 May 2009, exemplifies this by granting tariff concessions on certain ore concentrate thickening and filtration plant, acknowledging the absence of substitutable goods produced in Australia. The policy objective behind this concession is to encourage the import of specialised equipment that is not domestically manufactured, thereby supporting industries that rely on such imports.
Scope and Application
The Tariff Concession Instrument No. 0904682 under the Customs Act 1901 applies to specific goods, in this instance, certain ore concentrate thickening and filtration plant, which are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. The instrument targets importers of these goods by granting them a lower rate of customs duty, specifically reducing it from 5% to free. This concession is applicable to goods imported on or after 11 February 2009, the date on which the application for the TCO was lodged, as per subsection 269S(1) of the Act. The Act does not disadvantage any person other than the Commonwealth and imposes no liabilities on such persons in relation to anything done or omitted before the TCO's registration date. The rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
The scope of this Act extends across the Commonwealth of Australia, with the CEO of Customs having the authority to make TCOs that apply nationally. The Act does not specify any exclusions or exemptions beyond the goods outlined in section 269SJ, which cannot be subject to a TCO. Any subordinate instruments that might extend or restrict the application of this Act are not detailed in the provided explanatory statement but would typically be found in associated regulations or further legislative instruments.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0904682 are contained within the Customs Act 1901 and its associated regulations. Specifically, section 269F (1) of the Act allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the application meets the core criteria outlined in sections 269B and 269C of the Act, the CEO must make a TCO declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). In this instance, the CEO has made a TCO for certain ore concentrate thickening and filtration plant, applying item 50 of Schedule 4 to the Tariff, which imposes a duty rate of free rather than the general rate of 5%.
The Act imposes several obligations on the parties involved. For instance, the CEO is obligated to ensure that the application for a TCO is valid and meets the core criteria. In this case, the CEO determined that the application from Lynas Corporation met the necessary criteria, as no substitutable goods were being produced in Australia at the time of the application. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, no submissions were received.
There are specific consequences for breaches of the Act and its regulations. However, the Explanatory Statement does not explicitly detail these penalties. Generally, breaches of the Customs Act 1901 can lead to a range of civil and criminal penalties. Civil penalties can include fines, while criminal penalties may involve imprisonment, depending on the severity and intent behind the breach. The maximum penalties are not specified in this Explanatory Statement but are detailed in the relevant sections of the Customs Act and associated regulations.
In summary, the Tariff Concession Instrument No. 0904682 under the Customs Act 1901 facilitates the granting of tariff concessions for certain goods. The CEO's role is to assess applications against the core criteria and publish notices inviting submissions from interested parties. Once a TCO is made, it effectively lowers the customs duty on specified goods, benefiting importers who can apply for duty refunds. The Act imposes procedural obligations on the CEO and potential obligations on applicants, while breaches can result in civil or criminal penalties, though specific penalties are not detailed in this Explanatory Statement.