EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912025
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 Pty Ltd applied for a TCO in respect of certain lateral ties on 26 June 2009.
Instrument
TCO No 0912025 was made on 26 June 2009. It declares that those certain lateral ties 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. 0912025 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs and excise duties, including provisions for tariff concessions. The legislation was designed to address the need for a streamlined process to grant tariff concessions that lower customs duties on specific goods, provided certain criteria are met. One such tool within the Act is the Tariff Concession Order (TCO), which can be applied for by interested parties and granted by the Chief Executive Officer of Customs (CEO) under section 269F. This process was introduced to encourage the importation of goods that are not produced domestically, thus supporting industries reliant on imported materials. The policy objective is to foster economic efficiency and support industries by reducing the cost of imported materials through tariff concessions, thereby enhancing competitiveness without imposing additional burdens on existing rights or liabilities. The explanatory statement for Tariff Concession Instrument No. 0912025 clarifies that the specific instrument was enacted to provide tariff concessions on certain lateral ties, resulting in a zero rate of duty for these goods.
Scope and Application
The Customs Act 1901, as applied under Tariff Concession Instrument No. 0912025, applies to goods that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This instrument specifically concerns certain lateral ties, which are now subject to a lower rate of customs duty as declared by TCO No. 0912025. The Act applies to any person or entity that imports or intends to import the specified goods, thereby benefiting from the duty concession. This concession is available nationally and is subject to the conditions outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The application process requires that the goods in question are not substitutable by any goods produced in Australia, ensuring the concession benefits imports where local production is not feasible. The geographic reach of this Act is nationwide, and it does not impose any liabilities on any person for actions taken before the date of the TCO registration.
Key Provisions
The Tariff Concession Instrument No. 0912025 under the Customs Act 1901 provides for a concession on customs duty for certain lateral ties, as applied for by Boyne Smelters Pty Ltd. This instrument (section 269P(3)) mandates that the Chief Executive Officer (CEO) of Customs issue a Tariff Concession Order (TCO) when satisfied that the application meets the core criteria, specifically, that no substitutable goods are produced in Australia (section 269C). For these particular lateral ties, the TCO declares that item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting a duty-free status to these goods (section 269P(3)). The TCO also establishes that it will come into effect from the date the application was lodged, 8 April 2009 (subsection 269S(1)).
Under this legislation, the CEO is tasked with several obligations, primarily ensuring that any application for a TCO is assessed against the core criteria specified in the Act. This includes verifying that no substitutable goods are produced in Australia on the date the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the making of the TCO (subsection 269K(1)). If no objections are received, the CEO must proceed to make the TCO (section 269P(3)). The CEO also has the responsibility to ensure that the TCO does not affect the rights of any person adversely and does not impose any new liabilities (subsection 269S(2)).
In terms of compliance and enforcement, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the breach of TCO provisions. However, general provisions of the Customs Act may apply, including potential civil or criminal penalties for non-compliance with customs laws. For example, failure to comply with the conditions of the TCO or making false statements could result in fines or imprisonment under the broader provisions of the Customs Act. The exact penalties would be determined by the relevant courts based on the nature and severity of the breach.
The rights of importers are positively affected by the TCO, as they can apply for a refund of duty on goods imported since the TCO came into effect, pursuant to the Regulations (paragraph 126(1)(r) of the Regulations). This provision ensures that importers who have already paid duty on these goods prior to the TCO's effective date can seek reimbursement. Importantly, the TCO does not impose any liabilities on any person, nor does it affect the rights of any person adversely, ensuring that there are no retrospective liabilities or disadvantages (subsection 269S(2)).