EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919305
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 Pty Ltd applied for a TCO in respect of certain ball mill parts on 09 June 2009.
Instrument
TCO No 0919305 was made on 04 September 2009. It declares that those certain ball 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. 0919305 is taken to have come into force on 09 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise in Australia. One of the key features of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which were introduced to address the issue of promoting specific industries by reducing the customs duty on certain imported goods, provided that no substitutable goods are produced in Australia. This legislative measure was designed to assist businesses by lowering their costs and enhancing their competitiveness, thereby supporting economic growth. The Tariff Concession Instrument No. 0919305, made in 2009, is an example of how this scheme operates in practice, illustrating the process of granting tariff concessions to specific goods, such as certain ball mill parts, which benefit from a reduced duty rate as per the Customs Tariff Act 1995.
Scope and Application
The Customs Act 1901, specifically as outlined in Tariff Concession Instrument No. 0919305, applies to individuals or entities seeking tariff concessions for certain goods imported into Australia. This Act is applicable nationally, governed by the Commonwealth, and extends to any person or entity that applies for a Tariff Concession Order (TCO) in respect of goods as per section 269F of the Act. The instrument primarily targets goods that are not produced in Australia in the ordinary course of business, ensuring that the application for a TCO meets the core criteria stipulated under sections 269C, 269D, 269E, and 269P of the Act. The TCO, once issued, grants the applicant a lower rate of customs duty, with the specific instance of Moly Metals Pty Ltd receiving a free rate for certain ball mill parts. The instrument ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the concession, and it does not impose any new liabilities on persons. The application and implementation of this legislation are further regulated and possibly extended by subordinate instruments under the Customs Regulations 1994.
Key Provisions
The main operative sections of this legislation (sections 269C, 269B, 269E, 269D, 269P(3), and 269S) detail the process for making a Tariff Concession Order (TCO). Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269B and 269E. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written TCO. This order specifies that the goods in question will be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which in this case reduces the duty rate from 5% to free. Section 269S provides that the TCO is effective from the date the application was lodged.
The Act imposes certain obligations and requirements on the parties involved. An applicant, such as Moly Metals Pty Ltd, must submit an application to the CEO for a TCO, ensuring it complies with the core criteria outlined in the Act. The CEO is mandated to assess the application, determine if it meets the criteria, and publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted. If no submissions are received, the CEO must proceed to issue the TCO. The CEO is also required to ensure that the TCO does not impose any liabilities on any person, nor disadvantage anyone's rights as at the date of registration.
The legislation also outlines the consequences for non-compliance with the provisions of the Act. While specific offences, penalties, or consequences are not detailed in the explanatory statement, breaches of the Customs Act 1901 generally can lead to civil or criminal penalties. These could include fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties can vary widely based on the specific breach and are typically outlined in the relevant sections of the Customs Act and associated regulations. The TCO itself does not impose any liabilities but may affect the rights of importers beneficially, allowing them to apply for a refund of duty on goods imported since the TCO's effective date.