EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931868
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 Limited applied for a TCO in respect of certain compressors on 28 August 2009.
Instrument
TCO No 0931868 was made on 20 November 2009. It declares that those certain compressors 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. 0931868 is taken to have come into force on 28 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 and excise, including the imposition of tariffs on imported goods. To address specific economic needs and promote certain industries, the Act allows for the creation of Tariff Concession Orders (TCOs), which can reduce or eliminate customs duty on certain goods. This legislative mechanism aims to ensure that Australian industries remain competitive by providing tariff relief where necessary. The Tariff Concession Instrument No. 0931868, issued under the authority of the Customs Act, grants a tariff concession for certain compressors applied for by Boyne Smelters Limited. This instrument was introduced to provide relief from the general customs duty rate of 5% to a zero rate for the specified goods, effective from the date of application on 28 August 2009. This measure is intended to support the relevant industry by making the imported goods more competitively priced without imposing any new liabilities or disadvantaging existing stakeholders.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCO) which apply a lower rate of customs duty to particular goods. These orders are made by the Chief Executive Officer of Customs when an application is received and deemed to meet the core criteria set out in the Act. A TCO application is eligible if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This applies to all entities and individuals seeking tariff concessions for goods not listed in section 269SJ of the Act, which specifies goods ineligible for a TCO. The instrument has a national reach across Australia, governed by the Commonwealth. There are no exclusions or exemptions explicitly stated in the Act beyond those goods specified in section 269SJ. The application of the Act can be further refined through subordinate instruments, although specific details regarding these are not elaborated in the explanatory statement. The process ensures that the rights of importers are protected and potentially benefited by allowing them to apply for refunds of duty on goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer of Customs (CEO) to create Tariff Concession Orders (TCOs) (sections 269F and 269C). These orders apply a reduced rate of customs duty to goods that meet certain criteria. An individual or entity can apply for a TCO, and if the application pertains to goods not excluded under section 269SJ, the CEO evaluates whether the application fulfills the core criteria. A key criterion is that on the date of application, no similar goods are being produced in Australia in the ordinary course of business (section 269C). If the CEO is convinced that the application satisfies these criteria, they must issue a written order, the TCO, stating that the specified goods are subject to a particular duty rate outlined in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by the Act on parties or entities include the requirement for applicants to ensure their applications meet the criteria outlined in section 269C. The CEO must review the application and, if satisfied, issue the TCO. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be issued (subsection 269K(1)). If no submissions are received, the TCO can proceed. The TCO itself does not affect existing rights of individuals or entities and does not impose new liabilities, as long as it pertains to actions taken after the TCO's effective date (subsection 269S(1)).
Breaches of the provisions within the Customs Act 1901 can lead to various legal consequences. For instance, if a party provides false information in an application for a TCO, they may face civil or criminal penalties. The maximum penalties for such offences can include substantial fines and, in some cases, imprisonment. However, specific penalties are not detailed within the provided explanatory statement and would need to be referred to in the relevant sections of the Customs Act 1901 and associated regulations. The Act ensures that the rights of importers are protected, allowing them to apply for refunds of duties paid on the goods since the TCO's effective date (paragraph 126(1)(r) of the Regulations).