EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920922
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.
Boyne Smelters Pty Ltd applied for a TCO in respect of certain aluminium potline cell tending assembly parts on 19 June 2009.
Instrument
TCO No 0920922 was made on 14 September 2009. It declares that those certain aluminium potline cell tending assembly 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. 0920922 is taken to have come into force on 19 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, provides a framework for the imposition of customs duties on imported goods. A significant aspect of this legislation is the Tariff Concession Order (TCO) scheme, which allows for the application of lower rates of customs duty on certain goods. This scheme was introduced to address the problem of ensuring that Australia's manufacturing and industry sectors can compete effectively by reducing the cost of importing necessary components and materials. The Explanatory Statement for Tariff Concession Instrument No. 0920922, issued on 14 September 2009, pertains to an application by Boyne Smelters Pty Ltd for a TCO concerning certain aluminium potline cell tending assembly parts. The policy objective here is to support the domestic industry by ensuring that such essential components are imported at a lower duty rate, thereby facilitating their use in Australian manufacturing processes without the burden of high customs duties.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0920922, pertains to the process and conditions under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This Act applies to any individual or entity seeking a reduction in customs duty on specified goods, provided that the goods are not listed in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The instrument specifically addresses Boyne Smelters Pty Ltd's application for a TCO concerning certain aluminium potline cell tending assembly parts, which has resulted in the goods being subject to a duty rate of free, down from the general rate of 5%. This legislation operates on a national level across Australia, governed by the Commonwealth. The instrument is effective as of the date the application was lodged, 19 June 2009, without retroactive effects on pre-existing rights or liabilities. The scope of the TCO is confined to the goods specified in the application and does not extend to any other goods unless explicitly stated in subordinate instruments.
Key Provisions
The main operative sections of this legislation concern Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods. If the CEO determines that the application meets the core criteria set out in section 269C, they must issue a written order (a TCO) applying a lower rate of customs duty to the goods (subsection 269P(3)). In this case, TCO No. 0920922 was issued on 14 September 2009, declaring that certain aluminium potline cell tending assembly parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5% (subsection 269S(1)).
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person may apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act (section 269F). The CEO must assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Substitutable goods are defined as those produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods in question can be put (section 269D and 269E). Secondly, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO (subsection 269K(1)).
Breaches of the obligations and requirements set out in the Customs Act 1901 may result in civil or criminal consequences. However, this particular TCO does not outline any specific offences, penalties, or consequences for breach. It is important to note that while the TCO does not affect the rights of any 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, it does provide for a refund of duty for importers of such goods since the day on which the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
In conclusion, TCO No. 0920922 provides tariff concession for certain aluminium potline cell tending assembly parts, allowing for a lower rate of customs duty to be applied. The Customs Act 1901 imposes obligations on applicants to meet the core criteria for a TCO and on the CEO to assess applications and publish notices inviting submissions. While there are no specific penalties outlined for breach of the Act in this TCO, the rights of importers will be beneficially affected, and the TCO does not impose any liabilities on any person.