EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925543
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 electric chain hoists on 17 July 2009.
Instrument
TCO No 0925543 was made on 02 October 2009. It declares that those certain electric chain hoists 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. 0925543 is taken to have come into force on 17 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, established a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This Act was designed to address the problem of applying preferential tariff rates to specific goods that are not produced in Australia, thus encouraging imports by reducing duty costs. The explanatory statement for Tariff Concession Instrument No. 0925543, made under this Act, clarifies the process by which Rio Tinto Aluminium successfully applied for a TCO concerning certain electric chain hoists. The policy objective here is to facilitate the import of goods not domestically produced, thereby potentially lowering costs for businesses and consumers and promoting trade efficiency. The instrument was published in the Gazette, inviting any interested parties to submit objections, though none were received, leading to the instrument's effective commencement on the date of application.
Scope and Application
The Tariff Concession Instrument No. 0925543 under the Customs Act 1901 applies to entities and individuals who import certain electric chain hoists, as specified in the instrument. It is a Commonwealth legislation, meaning it applies nationally and is overseen by the Chief Executive Officer of Customs, who is responsible for making Tariff Concession Orders (TCOs). This particular TCO, issued on 2 October 2009, pertains to electric chain hoists and reduces the duty rate from 5% to free. The TCO came into force on the date of application, 17 July 2009, but does not affect the rights of any person adversely or impose liabilities on any person in respect of actions taken before the registration date. The instrument is specific to the goods mentioned and does not apply to other goods unless explicitly stated. The Act allows for the possibility of submissions from interested parties, although in this case, none were received. The instrument does not specify any exclusions, exemptions, or thresholds, and its application can be extended or restricted through subordinate instruments as necessary.
Key Provisions
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (section 269F). An application for a TCO can be submitted by a person seeking a lower rate of customs duty for specific goods (section 269F). The CEO must assess whether the application complies with the core criteria, particularly ensuring the goods are not those specified in section 269SJ, which cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, such as when no substitutable goods are produced in Australia in the ordinary course of business (section 269C), a TCO is issued.
Entities or individuals seeking a TCO must ensure their application complies with the core criteria laid out in the Act. This involves demonstrating that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business (section 269C). The CEO’s role includes assessing the application and making a written order if the criteria are met (subsection 269P(3)). Moreover, as soon as practicable after accepting a TCO application, the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made (subsection 269K(1)).
The Act stipulates that any breach of its provisions related to TCOs can result in penalties. While the explanatory statement does not explicitly detail these, breaches of the Customs Act generally can lead to both civil and criminal penalties. Civil penalties may include fines, and criminal penalties can include imprisonment, depending on the severity of the breach. The exact penalties are not detailed in the provided explanatory statement but can be found in the relevant sections of the Customs Act and associated regulations.
In summary, TCOs under the Customs Act 1901 allow for reduced customs duties on specified goods, provided certain criteria are met. Applicants must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The CEO has the authority to issue these orders and must publish notices in the Gazette to allow for public submissions. The rights of importers are beneficially affected, and they can apply for refunds of duty on eligible goods. The Act imposes obligations on applicants and the CEO to ensure compliance with the TCO process, and breaches can result in civil or criminal penalties.