EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927614
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 applied for a TCO in respect of certain rail alignment assembly on 30 July 2009.
Instrument
TCO No 0927614 was made on 16 October 2009. It declares that those certain rail alignment assembly 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. 0927614 is taken to have come into force on 30 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 Australian Parliament, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. This mechanism aims to address the economic disadvantage faced by industries due to the lack of local production of specific goods. The Tariff Concession Instrument No. 0927614, which was made under this Act, specifically targets the case of Boyne Smelters, who applied for a TCO concerning certain rail alignment assemblies. The instrument was enacted to declare that these assemblies are subject to a zero rate of duty, effective from the date the application was lodged. The policy objective is to ensure that the concession does not disadvantage any person and to provide potential benefits to importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0927614 under the Customs Act 1901 applies to individuals and entities, specifically those seeking tariff concessions for certain goods that are not produced in Australia and for which substitutable goods are not available domestically. This applies to the rail alignment assemblies that Boyne Smelters sought to import. The geographic and jurisdictional reach of this legislation is Commonwealth-wide, as it pertains to the federal customs duties outlined in the Customs Act 1901. The application of the Act is restricted by section 269SJ which excludes certain goods from being subject to a Tariff Concession Order (TCO). The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable duty rates. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, but rather provides a benefit to importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0927614, establish a framework for the creation of Tariff Concession Orders (TCOs) through which reduced customs duties can be applied to certain goods. Section 269F outlines the process by which a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods in question are not specified in section 269SJ as those that cannot be subject to a TCO. Section 269C specifies the core criteria an application must meet, namely that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO must make a written order, a TCO, under section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the CEO include ensuring that any TCO application not involving goods specified in section 269SJ is assessed against the core criteria outlined in section 269C. Should the CEO be satisfied that these criteria are met, they must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission, as per subsection 269K(1). In this case, no submissions were received. The TCO is deemed to have come into force on the day the application was lodged, as per subsection 269S(1). This means that the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the obligations and requirements set out in the Customs Act 1901, or with the terms of the TCO, may lead to various consequences. While the explanatory statement does not detail specific offences, penalties, or consequences for breach, it is understood that any contravention of the Act or TCO could result in legal action. Under Australian law, breaches of customs regulations can result in civil or criminal penalties, including fines and imprisonment. The maximum penalties would depend on the specific nature of the breach and could be found in other sections of the Customs Act or related legislation. However, the explanatory statement does not provide details on the maximum penalties applicable to this particular TCO.