EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919388
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 or jaw parts on 09 June 2009.
Instrument
TCO No 0919388 was made on 04 September 2009. It declares that those certain gyratory crusher or jaw 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. 0919388 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 Tariff Concession Instrument No. 0919388, enacted in 2010 under the Customs Act 1901, addresses the issue of applying tariff concessions to specific goods, thereby reducing the customs duty on these items. This instrument was introduced by the Chief Executive Officer of Customs following an application by Moly Metals Pty Ltd for tariff concessions on certain gyratory crusher or jaw parts. The objective of this measure is to ensure that the application of tariff concessions aligns with the criteria set out in the Customs Act, specifically by confirming that no substitutable goods were produced in Australia. The instrument was published in the Gazette, inviting submissions, though none were received. Consequently, the tariff concession order came into force on the date the application was lodged, which is beneficial to importers by allowing them to apply for a refund of duty for goods imported since that date. The Tariff Concession Instrument No. 0919388 ensures that the process is transparent and that no new liabilities are imposed on any party, except for the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0919388, made under the Customs Act 1901, applies specifically to certain gyratory crusher or jaw parts, as designated in the instrument. The application for this tariff concession order was submitted by Moly Metals Pty Ltd on 09 June 2009, and the instrument was registered on 04 September 2009. The primary effect of this instrument is to reduce the duty on these particular goods from a general rate of 5% to a concessional rate of free, effective from the date of the application. The instrument ensures that no existing rights of persons (other than the Commonwealth) are adversely affected and does not impose any new liabilities on any person. The instrument operates under the broader scheme established by the Customs Act 1901, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders if certain criteria are met, including the absence of substitutable goods produced in Australia. The instrument’s application is confined to the specified goods and does not extend to other goods or industries unless similarly qualified applications are made and approved.
Key Provisions
The Tariff Concession Instrument No. 0919388 under the Customs Act 1901 primarily concerns the application of Tariff Concession Orders (TCOs) for certain goods. Section 269F (1) of the Act allows for the application of a TCO by a person to the Chief Executive Officer of Customs (CEO), provided the goods are not specified in section 269SJ, which lists goods ineligible for a TCO. The CEO must then determine whether the application meets the core criteria as outlined in sections 269C, 269D, and 269E. These sections establish that a TCO application is valid if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO finds that the application meets these criteria, a written order is made under section 269P(3), declaring that the goods are subject to a specified tariff concession.
The obligations imposed by the Act on the parties involved are quite straightforward. The applicant, such as Moly Metals Pty Ltd in this case, must ensure their application complies with the core criteria mentioned above. The CEO has the duty to review the application, consult if necessary, and make a decision based on the information provided. If the CEO decides to issue a TCO, the instrument must be published in the Gazette as per section 269K(1), inviting any interested party to lodge a submission against the concession. In this instance, no submissions were received. The TCO then comes into force on the date of the application as per section 269S(1), and any applicable rights or liabilities are governed accordingly.
In terms of consequences, the Act does not explicitly outline criminal or civil penalties for non-compliance with the TCO provisions. However, any misuse or incorrect application of a TCO could potentially lead to investigations by Customs, with subsequent actions such as duty refunds being disallowed or other financial penalties imposed under the Customs Act 1901 and associated regulations. For instance, under paragraph 126(1)(r) of the Regulations, importers who fail to comply with the terms of a TCO might face penalties for incorrect duty applications or refunds. The main focus of the Act appears to be ensuring the correct and fair application of tariff concessions without imposing undue burdens or liabilities on parties involved.