EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928926
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.
Terex Mining applied for a TCO in respect of certain speed reducers on 07 August 2009.
Instrument
TCO No 0928926 was made on 23 October 2009. It declares that those certain speed reducers 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. 0928926 is taken to have come into force on 07 August 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, establishes a framework for the administration of customs duties, including the ability to apply for tariff concession orders (TCOs). This legislative instrument, known as Tariff Concession Instrument No. 0928926, was introduced to address the specific issue of providing tariff concessions on certain goods where no substitutable goods are produced in Australia. This instrument was enacted to ensure that the application process for TCOs adheres to the core criteria outlined in the Customs Act, specifically focusing on the non-availability of substitutable goods in Australia. The policy objective is to facilitate the importation of goods that are not domestically produced, thereby potentially reducing costs for importers and enhancing competitiveness without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) which can reduce customs duty rates on specific goods. The Act applies to any person or entity seeking a reduction in customs duty on goods through the application process, provided the goods are not specified in section 269SJ as ineligible for a TCO. The CEO of Customs is responsible for assessing applications and determining whether they meet the core criteria outlined in sections 269C, 269B, and 269D of the Act. If the application is approved, a TCO is issued, effectively applying a lower rate of duty to the specified goods. The geographic and jurisdictional reach of this Act is national, as it operates under the Commonwealth framework. Notably, the TCO does not impose any new liabilities and does not affect the rights of persons adversely, except to the benefit of importers who may claim refunds on duties paid prior to the TCO's effective date. The Act may be further extended or restricted through subordinate instruments, such as regulations, which provide additional detail on the application and implementation of TCOs.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0928926 under the Customs Act 1901 (section 269C, 269P, and 269S) specify the process for granting a Tariff Concession Order (TCO) and its effects. Section 269C stipulates that the Chief Executive Officer of Customs (CEO) must decide if an application for a TCO meets the core criteria, primarily that no substitutable goods are produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P requires the CEO to make a written order (TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a rate of duty determined by that schedule.
The obligations imposed by the Act on the parties it governs include the requirement for Terex Mining to ensure that their application for a TCO is valid and meets the core criteria. The CEO of Customs is obligated to assess the application against these criteria, publish a notice in the Gazette inviting submissions from any interested parties, and make a decision based on the application and any submissions received. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person.
Under the Customs Act, any failure to comply with the provisions of the Act, including the failure to meet the core criteria for a TCO, could potentially lead to civil or criminal consequences. However, the Explanatory Statement does not explicitly detail specific offences or penalties for non-compliance in this context. The potential for penalties would typically be determined by the broader provisions of the Customs Act and any relevant regulations.
In summary, section 269C and 269P of the Customs Act set out the process for granting a TCO, with section 269S providing for the commencement of the TCO on the day the application is lodged. The obligations of the CEO involve assessing applications, publishing notices, and making written orders where applicable, while Terex Mining must ensure their application meets the core criteria. There are no explicit penalties mentioned in the provided text, but general compliance with the Customs Act would be expected.