EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0924278
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.
Rio Tinto Aluminium applied for a TCO in respect of certain submerged drag chain conveyor on 09 July 2009.
Instrument
TCO No 0924278 was made on 25 September 2009. It declares that those certain submerged drag chain conveyor 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. 0924278 is taken to have come into force on 09 July 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 Parliament of Australia, provides for the regulation of imports and exports, including the imposition of customs duty on goods. Part XVA of the Act introduces a scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to reduce or eliminate customs duty on specified goods, provided certain criteria are met. This scheme was established to address the gap in tariff concessions for goods that are not produced in Australia and for which there are no substitutable goods, thereby encouraging the importation of goods that are not domestically produced and potentially fostering competition and innovation within the Australian market. The policy objective is to support the efficient operation of Australian businesses by reducing the cost of imported goods where appropriate.
Scope and Application
The Customs Act 1901, as amended, provides for the implementation of Tariff Concession Orders (TCOs) under Part XVA, which is applicable to any person or entity seeking to import goods into Australia that meet specific criteria. These criteria include the absence of substitutable goods produced in Australia, as defined under sections 269D and 269E of the Act, thereby ensuring that the concession does not undermine domestic production. The scope of the Act extends across the Commonwealth, thereby affecting all states and territories uniformly. The application of a TCO, such as Instrument TCO No 0924278, which pertains to certain submerged drag chain conveyors, is limited to those goods specified in the order and does not extend to goods listed under section 269SJ of the Act. The Act allows for the CEO of Customs to make written orders that apply specific tariff concessions, in this case, granting a free rate of duty for the specified goods instead of the general rate of 5%. The geographic reach of these concessions is nationwide, and they are effective from the date the application was lodged, as outlined in subsection 269S(1) of the Act. The Act and its subordinate instruments do not impose any liabilities on any person, and the rights of importers are beneficially affected, allowing them to apply for duty refunds for goods imported since the commencement date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0924278 are sections 269C, 269P, and 269S. Section 269C (3) of the Customs Act 1901 sets out the core criteria that a Tariff Concession Order (TCO) application must meet. Section 269P (3) provides that if these criteria are met, the Chief Executive Officer of Customs (CEO) must make a TCO. Section 269S details the commencement date of the TCO, which is the date on which the application was lodged.
The Act imposes specific obligations and requirements on the CEO when considering a TCO application. Once an application is deemed valid, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties (subsection 269K(1)). This notice is a means to ensure transparency and provide an opportunity for objections to be raised. In this case, the CEO did not receive any submissions in response to the published notice. Additionally, the Act stipulates that a TCO must be made if the application meets the core criteria, and the TCO will apply to goods from the date the application was lodged (subsection 269S(1)).
In terms of offences, penalties, or consequences, the Act does not explicitly state any criminal or civil penalties for failure to comply with the TCO requirements or for breaching the conditions of a TCO. However, it does clarify that the TCO does not affect the rights of any person, other than the Commonwealth, in respect of anything done or omitted before the date of registration. It also highlights that the TCO does not impose any liabilities on any person. Any breaches of the terms of the TCO or the Act itself would likely be subject to the general provisions of the Customs Act 1901, which may include fines or other penalties as outlined in the relevant sections of the Act.