EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919304
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.
Moly Metals Australia Pty Ltd applied for a TCO in respect of certain hydraulic rock breakers on 9 June 2009.
Instrument
TCO No 0919304 was made on 12 November 2009. It declares that those certain hydraulic rock breakers 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. One submission objecting to the TCO application was received from Flsmidth Abon Pty Ltd.
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. 0919304 is taken to have come into force on 9 June 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. This Act was designed to facilitate the regulation of imports and exports, ensuring that customs duties are applied appropriately and efficiently. A key component of this regulatory scheme is the Tariff Concession Order (TCO) mechanism, which allows for the concession of customs duties on specific goods under certain conditions. The Customs Act 1901 provides the Chief Executive Officer of Customs with the authority to make TCOs, thereby allowing for the application of lower rates of customs duty on goods that meet specific criteria. This mechanism was introduced to address the need for flexibility in customs duty application, particularly in cases where certain goods are not produced domestically or where the application of full duty would otherwise be inappropriate. The policy objective of this legislative framework is to support Australian industries by providing tariff relief where necessary, while ensuring that the application of customs duties remains fair and transparent.
Scope and Application
The Tariff Concession Instrument No. 0919304 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), specifically to certain hydraulic rock breakers in this instance. The Act allows the Chief Executive Officer of Customs to make a TCO which applies a lower rate of customs duty to the specified goods, provided the application meets the core criteria outlined in the Act. This mechanism is designed to benefit importers by reducing the duty on certain goods, contingent on the absence of substitutable goods produced in Australia in the ordinary course of business. The geographic and jurisdictional reach of this Act is national, as it pertains to customs duties across Australia. The application and implementation of TCOs are further governed by subordinate instruments and regulations, which can extend or restrict the application of the Act. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person in respect of anything done or omitted to be done before the date of registration of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0919304, under section 269P(3) of the Customs Act 1901, grants a tariff concession order (TCO) for certain hydraulic rock breakers. This order reduces the customs duty from the general rate of 5% to free duty, effective from the date the application was lodged, 9 June 2009. The key provision is that the Chief Executive Officer of Customs (CEO) must make a written order if satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C).
The Customs Act imposes several obligations on the CEO when processing a TCO application. Firstly, the CEO must determine whether the application meets the core criteria, which includes verifying that the goods in question are not specified in section 269SJ of the Act (section 269F). If the application is valid, the CEO must make a written order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties who may object to the TCO application (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act or the conditions of a TCO can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, it is understood that breaches of the Act could result in civil or criminal penalties. For instance, incorrect application for a TCO or misrepresentation of facts could lead to fines or other legal actions. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Act and related regulations.
In summary, the Tariff Concession Instrument No. 0919304 provides a tariff concession for certain hydraulic rock breakers, with the CEO's role being pivotal in assessing and approving such applications. The Act outlines clear obligations for the CEO, including the assessment of applications, publication of notices, and consideration of objections. Any breaches of the Act or conditions of a TCO may incur civil or criminal penalties, although the exact penalties are not specified in the explanatory statement.