EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919374
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 gyratory crusher support gantries on 9 June 2009.
Instrument
TCO No 0919374 was made on 4 September 2009. It declares that those certain gyratory crusher support gantries 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. 0919374 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 Tariff Concession Instrument No. 0919374, enacted in 2009 under the Customs Act 1901, addresses the gap in tariff concessions for specific goods not produced in Australia. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods if no substitutable goods are produced domestically. The instrument was created to facilitate lower customs duties on such goods, thereby promoting the importation of goods that are not domestically manufactured and aligning with the policy objective of fostering competitive markets and economic efficiency. The Australian Parliament enacted this legislation to ensure that the customs duty rates are fairly applied, particularly in cases where domestic production of similar goods is non-existent. The instrument is designed to benefit importers by potentially allowing them to claim refunds for duties paid on these goods before the tariff concession came into effect.
Scope and Application
The Customs Act 1901 applies to individuals and entities that are engaged in the import and export of goods in Australia. More specifically, the Act applies to those who apply for Tariff Concession Orders (TCOs) concerning goods that are subject to customs duty. The application process is overseen by the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria, such as the absence of substitutable goods produced in Australia. The Act's geographic reach is national, given its status as Commonwealth legislation. The scope of the Act extends to any goods not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The Act allows for the application to be made effective from the date it was lodged, and it does not impose any liabilities on individuals or entities other than the Commonwealth. Any refunds for duties paid prior to the TCO's effective date can be applied for by importers under the relevant regulations. The application and implementation of TCOs may also be guided by subordinate instruments, although these are not explicitly detailed in the provided text.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows for an application to be made by a person for a TCO in respect of specific goods. The CEO must then assess the application against the criteria outlined in section 269C, which requires that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these core criteria, the CEO is mandated under section 269P(3) to issue a written TCO, effectively lowering the customs duty on the specified goods. For instance, in the case of TCO No. 0919374, Moly Metals Pty Ltd successfully applied for a concession on gyratory crusher support gantries, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on both the CEO and applicants. The CEO must ensure that each TCO application is evaluated against the core criteria, which include verifying the absence of substitutable goods produced in Australia. Once an application is deemed valid, the CEO must issue a TCO and publish a notice in the Gazette inviting any objections. This notice-and-comment period is a statutory requirement under subsection 269K(1). In this case, the CEO did not receive any submissions, which facilitated the swift issuance of TCO No. 0919374. The applicant, on the other hand, must provide sufficient information to satisfy the CEO that the application meets the core criteria.
Under the Customs Act 1901, any breaches or non-compliance with the provisions regarding TCOs could potentially lead to penalties. Although the explanatory statement does not specify detailed penalties, the general legal framework suggests that non-compliance with customs regulations can result in fines or other legal consequences. The specific penalties would depend on the nature and severity of the breach, as outlined in other relevant sections of the Customs Act and associated regulations.
In terms of civil and criminal consequences, any party that fails to comply with the Act's provisions or abuses the TCO system could face legal action. This might include financial penalties, the revocation of the TCO, or other corrective measures as deemed appropriate by the court. The explanatory statement does not provide explicit details on maximum penalties, but it is clear that adherence to the Act’s requirements is crucial to avoid any adverse legal outcomes.