EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927686
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.
Joy Mining Co Pty Ltd applied for a TCO in respect of certain flexible conveyor train parts on 31 July 2009.
Instrument
TCO No 0927686 was made on 23 October 2009. It declares that those certain flexible conveyor train 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.
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. 0927686 is taken to have come into force on 31 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 was enacted by the Australian Parliament to regulate the import and export of goods within Australia. The Act provides a framework for the imposition and collection of customs duties and other charges on goods entering or leaving the country. The Tariff Concession Instrument No. 0927686, issued in 2010, is a specific application of this Act, allowing for the reduction or elimination of customs duty on certain goods, provided certain conditions are met. This instrument was introduced to address the need for tariff concessions that could support Australian industries by making imported goods more competitively priced without disadvantaging existing local producers. The policy objective behind this legislative instrument is to facilitate trade and economic efficiency by ensuring that certain imported goods are not subject to customs duty, thereby encouraging their use and integration into the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0927686 under the Customs Act 1901 applies to the specific goods—certain flexible conveyor train parts—submitted by Joy Mining Co Pty Ltd. This instrument is issued by the Chief Executive Officer of Customs (CEO) upon determining that the application for a Tariff Concession Order (TCO) meets the core criteria outlined in section 269C of the Act. These criteria are satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The application for a TCO was lodged on 31 July 2009, and the order came into effect on the same date, with the instrument officially made on 23 October 2009. The primary impact of this TCO is to alter the customs duty rate for these particular goods from the general rate of 5% to free, benefiting importers who may apply for a refund of duty for goods imported since the effective date. The legislation does not disadvantage any person, other than the Commonwealth, nor impose any liabilities on individuals for actions taken prior to the registration date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in this context, include section 269F (269F), which allows a person to apply for a Tariff Concession Order (TCO) from the Chief Executive Officer (CEO) of Customs. Section 269C (269C) specifies that the application meets core criteria if, at the time of application, no substitutable goods were produced in Australia. Section 269P(3) (269P(3)) mandates the CEO to issue a written order if the application meets these criteria, effectively reducing the duty on the specified goods. The Customs Tariff Act 1995 (Tariff) further details the rates of duty applicable to these goods.
The obligations and requirements imposed by the Act on the parties it governs include the duty for applicants to ensure their applications meet the core criteria as specified in sections 269C and 269SJ (269C, 269SJ). The CEO of Customs is required to review the applications, publish notices in the Gazette inviting submissions from interested parties, and make decisions based on the information and submissions received. Once a TCO is issued, it is effective from the date the application was lodged, as per subsection 269S(1) (269S(1)). The Act ensures that the rights of non-Commonwealth parties are protected from any disadvantage or liability imposed by the TCO prior to its registration.
Any breaches of the provisions outlined in the Customs Act 1901 could result in various consequences. While specific offences and penalties are not detailed in the explanatory statement, it is common under Australian legislation for breaches of customs regulations to incur civil and criminal penalties. These can include fines and imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined in accordance with the relevant laws and regulations governing customs duties and tariffs.