EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915970
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.
Rio Tinto Aluminium Limited applied for a TCO in respect of certain adjustable coal pulveriser outlet pipes on 11 May 2009.
Instrument
TCO No 0915970 was made on 31 July 2009. It declares that those certain adjustable coal pulveriser outlet pipes 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. 0915970 is taken to have come into force on 11 May 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 and facilitates the control of goods entering and leaving Australia. Specifically, Part XVA of the Act enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which grant lower rates of customs duty on certain goods. This provision was introduced to address the need for economic flexibility and competitiveness in the Australian market by allowing for tariff reductions on goods where Australian production does not exist or is not feasible. The policy objective is to encourage the importation of goods that are not produced domestically, thereby supporting industries reliant on imported components or materials. Tariff Concession Instrument No. 0915970, made under this Act on 31 July 2009, exemplifies this mechanism by granting a free rate of duty on certain adjustable coal pulveriser outlet pipes, benefitting importers by potentially reducing their duty liabilities on these goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs. The Act applies to any person or entity seeking a concession on customs duty for goods imported into Australia. The scope of the Act is limited to goods that are not specified in section 269SJ, which lists goods ineligible for tariff concessions. The application process involves an assessment by the CEO to determine if the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. Once the core criteria are met, a TCO is issued, which can result in a lower rate of duty on the specified goods, as demonstrated by Tariff Concession Instrument No. 0915970, which granted a free rate of duty on certain adjustable coal pulveriser outlet pipes. This Act has a national jurisdictional reach within Australia, and its application can be extended or restricted by subordinate instruments as needed. The commencement of a TCO is effective from the date the application is lodged, and it does not disadvantage any person other than the Commonwealth nor impose liabilities on any person for actions taken prior to the registration of the TCO.
Key Provisions
The Customs Act 1901, specifically within Part XVA, outlines a scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269K, and 269S). A TCO results in a lower rate of customs duty on goods specified in the order. Section 269F allows an application for a TCO to be made by any person, provided it is not for goods that cannot be subject to a TCO as specified in section 269SJ. If the CEO determines that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed tariff concession (section 269P(3)). In this instance, TCO No. 0915970 applies to certain adjustable coal pulveriser outlet pipes, with the rate of duty reduced from the general rate of 5% to free (item 50 of Schedule 4 to the Customs Tariff Act 1995).
Under the Customs Act 1901, the CEO has obligations to assess TCO applications against the core criteria, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this case (subsection 269K(1)). The TCO itself is deemed to have come into force on the day the application was lodged (subsection 269S(1)), in this case, 11 May 2009.
The Customs Act 1901 and the associated regulations impose certain obligations on the parties involved. The applicant for a TCO must ensure their application meets the specified criteria, and the CEO must diligently assess these applications. The CEO's decision-making process includes considering any submissions received from the public. Importers of the goods subject to a TCO may be eligible to apply for a refund of duty paid on those goods since the date the TCO came into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not affect the rights of any person other than the Commonwealth in a way that disadvantages them or imposes liabilities for actions taken prior to the TCO's registration.
In the event of non-compliance with the Customs Act 1901 or the terms of a TCO, there may be civil or criminal consequences. While the explanatory statement does not specify the penalties, breaches of customs laws can typically result in fines, imprisonment, or both, depending on the severity of the offence. The maximum penalties for customs-related offences can vary, but they often include significant financial penalties and potential imprisonment terms, reflecting the seriousness of evading or misapplying customs duties and regulations.