EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905856
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 applied for a TCO in respect of certain flood coaters on 19 February 2009.
Instrument
TCO No 0905856 was made on 15 May 2009. It declares that those certain flood coaters 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. 0905856 is taken to have come into force on 19 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, enacted by the Australian Parliament, established a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act aims to address the problem of ensuring that certain goods, which cannot be produced in Australia or have no substitutable goods produced domestically, receive a lower rate of customs duty. The specific legislation in question, Tariff Concession Instrument No. 0905856, was introduced to provide tariff concessions on certain flood coaters as applied by Bradken Resources. The instrument was enacted on 15 May 2009 and came into force on 19 February 2009, the date the application was lodged. This measure was taken after the CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria under the Act. The policy objective was to ensure that the rights of importers are beneficially affected and that no person, other than the Commonwealth, is disadvantaged or subjected to new liabilities as a result of this concession.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Order No. 0905856, applies to the importation of specific goods, namely certain flood coaters, by providing a concession on the customs duty applicable to these goods. The Act applies to entities and individuals who import these goods into Australia, granting them a tariff concession on the importation of these items, which would otherwise attract a general duty rate of 5%. The order was made in response to an application by Bradken Resources, and it became effective on the date of application, 19 February 2009. This legislative instrument operates within the Commonwealth jurisdiction and its application is not restricted by state or territory boundaries.
The order excludes any goods specified in section 269SJ of the Customs Act, which sets out those goods that cannot be subject to a tariff concession order. Additionally, the order does not affect the rights of any person, other than the Commonwealth, in relation to anything done or omitted to be done before the date of registration. However, it does benefit importers by allowing them to apply for a refund of duty on goods imported since the commencement date of the TCO. No submissions were received by the CEO in response to the published notice inviting comments on the TCO application, indicating broad acceptance or lack of opposition to the concession. The order's application may be further detailed or extended through subordinate instruments, but the primary focus here is the tariff relief for the specified flood coaters.
Key Provisions
The Tariff Concession Order (TCO) No. 0905856 under the Customs Act 1901 (section 269F) allows for a reduced rate of customs duty on certain flood coaters, a type of goods specified in the application by Bradken Resources. This reduction occurs because the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia, meeting the core criteria set out in section 269C of the Act. The TCO declares that these flood coaters are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, which sets the duty rate at zero, down from the general rate of 5%.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that the application is not for goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Upon receiving a valid application, the CEO must publish a notice in the Gazette inviting submissions from any interested parties and must consider these submissions before making a decision (subsection 269K(1)). In this case, no submissions were received, and the CEO proceeded to make the TCO. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's registration (subsection 269S(1)).
For breaches of the provisions under the Customs Act 1901, the Act provides for both civil and criminal penalties. Civil penalties may include fines and other financial penalties, while criminal penalties could include imprisonment or fines. However, the specific penalties are not detailed in the provided text, and one would need to refer to other sections of the Act or related legislation for precise information. The primary focus here is on ensuring that the TCO process is transparent and that no party is unfairly disadvantaged by the application of a TCO.