EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910964
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.
Xstrata Technology Pty Ltd applied for a TCO in respect of certain horizontal stirred grinding mill parts on 1 April 2009.
Instrument
TCO No 0910964 was made on 19 June 2009. It declares that those certain horizontal stirred grinding mill parts 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. 0910964 is taken to have come into force on 1 April 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. 0910964 was enacted in 2009 under the Customs Act 1901, addressing the need for a streamlined process to reduce customs duties on specific goods where no Australian-made alternatives exist. This instrument empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which lower the duty rates on certain imported goods, provided they meet specific criteria outlined in the Act. The Customs Act 1901, administered by the Australian Parliament, aims to facilitate international trade by enabling tariff reductions where necessary to support industries without local production capabilities. The policy objective behind this instrument is to encourage the import of goods that are not domestically produced, thus supporting industry competitiveness and economic growth by reducing costs for businesses relying on these imported components.
Scope and Application
The Tariff Concession Instrument No. 0910964 under the Customs Act 1901 applies to the specific goods, namely certain horizontal stirred grinding mill parts, as determined by the Chief Executive Officer of Customs (the CEO). This instrument pertains to entities or individuals who import these particular goods into Australia and seeks to provide a lower rate of customs duty by declaring these goods as subject to a Tariff Concession Order (TCO). The TCO, once registered, grants tariff concessions by effectively setting the duty on these goods at free, whereas the general rate is 5%. The instrument is applicable nationally and is implemented under the authority granted by section 269F of the Customs Act 1901. The geographic reach of this legislation encompasses all of Australia, with no specific exclusions outlined in the text. The CEO must ensure that the goods subject to the TCO are not substitutable by goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. Any subordinate instruments or regulations that may extend or restrict the application of this TCO are not detailed in the provided text but would be subject to the overarching framework of the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0910964, require the Chief Executive Officer of Customs (CEO) to assess applications for Tariff Concession Orders (TCOs) (s 269F). If the CEO is satisfied that the application meets the core criteria (s 269C), including that no substitutable goods were produced in Australia (s 269D, s 269E), they must issue a written TCO (s 269P(3)). This particular instrument, TCO No. 0910964, was made on 19 June 2009 and applies to certain horizontal stirred grinding mill parts, which are now subject to a zero rate of duty instead of the general rate of 5% (s 50 of Schedule 4 to the Customs Tariff Act 1995).
The Act imposes certain obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for a TCO (s 269SJ). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO (s 269K(1)). In this instance, no submissions were received by the CEO. The TCO itself does not affect any pre-existing rights or impose any liabilities on individuals or entities other than the Commonwealth (s 269S(1)). It specifically protects the rights of importers, allowing them to apply for a refund of duty on goods imported since the TCO came into force (Reg 126(1)(r)).
The Act also outlines specific offences, penalties, or consequences for breaches. While the explanatory statement does not detail the specific penalties for breaching the Customs Act 1901, it is known that breaches of customs laws can result in substantial fines and, in serious cases, criminal charges. For example, knowingly making a false statement in a customs document can result in a penalty of up to five times the amount of duty or tax that would have been payable if the correct statement had been made. The precise penalties depend on the nature and severity of the breach, but they can include both civil and criminal sanctions.
In summary, Tariff Concession Instrument No. 0910964 under the Customs Act 1901 provides for a TCO that lowers the duty on certain horizontal stirred grinding mill parts to zero. The CEO is required to assess applications and ensure they meet the core criteria before issuing a TCO. The process includes a public notice period for objections, although none were received in this case. The TCO does not impose any new liabilities and protects the rights of importers by allowing them to claim refunds on duties paid before the TCO's effective date. While the exact penalties for breaches are not detailed in the explanatory statement, breaches of the Customs Act can result in significant fines and criminal charges.