EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922295
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.
Newcrest Mining applied for a TCO in respect of certain tunnel loading machine on 30 June 2009.
Instrument
TCO No 0922295 was made on 18 September 2009. It declares that those certain tunnel loading machine 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. 0922295 is taken to have come into force on 30 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 was enacted by the Parliament of Australia to regulate and control the movement of goods into and out of Australia. One of the Act’s provisions allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, which apply lower rates of customs duty to certain goods. This mechanism was introduced to address the problem of ensuring that Australian businesses can access necessary goods at reduced rates, thereby fostering economic efficiency and competitiveness without unduly burdening the federal budget. The Tariff Concession Instrument No. 0922295, made on 18 September 2009, exemplifies this process by granting a tariff concession for certain tunnel loading machines, resulting in a reduction from a general duty rate of 5% to a rate of duty that is free. The instrument was enacted following a successful application by Newcrest Mining, and it came into effect on 30 June 2009. The policy objective is to support domestic industries by ensuring they have access to affordable imported goods that are not produced domestically.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply a lower rate of customs duty to specific goods, provided certain criteria are met. A person may apply to the CEO for a TCO, and if the application does not pertain to goods excluded under section 269SJ, the CEO assesses whether the application meets core criteria. These criteria are primarily defined by section 269C, which stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are further elaborated in sections 269D, 269E, and 269F of the Act respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. The CEO is also required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, although no submissions were received for TCO No. 0922295. The TCO does not retroactively affect the rights of any person, except to the benefit of importers who may apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0922295 under the Customs Act 1901 (section 269P(3)) involve the process of applying for and making a Tariff Concession Order (TCO). When an applicant, such as Newcrest Mining, applies for a TCO in respect of certain goods, the Chief Executive Officer of Customs (CEO) evaluates the application (section 269F). If the CEO determines that the application meets the core criteria, which includes ensuring no substitutable goods are produced in Australia (section 269C), a TCO is issued. This order declares that the specified goods are subject to a prescribed tariff item, effectively providing a lower or free rate of customs duty (section 269P(3)).
The obligations imposed by the Act on the parties involved primarily rest on the CEO. The CEO must assess the application to determine whether it meets the core criteria set out in the Act, including verifying that no substitutable goods are produced in Australia. Once the CEO is satisfied with the application, they must publish a notice in the Gazette inviting any objections to the TCO, although in this case, no submissions were received (subsection 269K(1)). The CEO also has the responsibility to ensure that the TCO does not adversely affect the rights of any person as at the date of registration and does not impose any liabilities on any person (subsection 269S(1)).
Any breaches of the provisions under the Customs Act 1901 can lead to various civil or criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, the Act generally provides for penalties, which can include fines or imprisonment, for non-compliance with customs regulations. In the context of TCOs, failure to adhere to the prescribed processes or provide accurate information in the application could result in penalties as outlined in the Customs Act. However, the maximum penalties are not specified in the provided text.