EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932965
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 Ltd applied for a TCO in respect of certain bauxite ship unloader on 07 September 2009.
Instrument
TCO No 0932965 was made on 27 November 2009. It declares that those certain bauxite ship unloader 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. 0932965 is taken to have come into force on 07 September 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 Commonwealth Parliament, addresses the need for a streamlined process to grant tariff concessions on certain imported goods, ensuring that Australia's trade policies are competitive and support industry growth. The Act established a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This allows for the application of a lower rate of customs duty on specified goods, provided they meet certain criteria such as the absence of substitutable goods produced in Australia. The aim is to facilitate the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials.
In 2009, a Tariff Concession Order (TCO No. 0932965) was issued for certain bauxite ship unloaders following an application by Rio Tinto Aluminium Ltd. The CEO of Customs determined that no substitutable goods were produced in Australia, satisfying the core criteria outlined in the Act. Consequently, the TCO was made, granting a free rate of duty on these specific goods, which otherwise would have been subject to a 5% duty rate. This legislative instrument was designed to benefit importers by potentially allowing them to claim refunds on duties paid on these goods since the effective date of the TCO, while ensuring no existing rights or liabilities of non-Commonwealth persons are adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0932965 under the Customs Act 1901 applies to goods specified in the instrument, namely certain bauxite ship unloaders, for which a lower rate of customs duty is granted. The instrument was made on 27 November 2009, following an application by Rio Tinto Aluminium Ltd on 07 September 2009. The instrument is applicable to the Commonwealth and operates within the national jurisdiction of Australia. The instrument provides tariff concessions based on the criteria outlined in the Customs Act 1901, specifically section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The instrument does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth. The instrument extends its application through the Customs Tariff Act 1995, which specifies the prescribed item of Schedule 4 to which the goods are subject.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0932965 under the Customs Act 1901 (the Act) primarily revolve around the process of applying for and granting Tariff Concession Orders (TCOs). Under section 269F (1), a person may apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application does not relate to goods specified in section 269SJ of the Act, which are ineligible for a TCO, the CEO must then determine whether the application meets the core criteria set out in section 269C. Specifically, the CEO must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the core criteria are met, they must make a written order, a TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties involved. Section 269K (1) requires the CEO to publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to the notice. Furthermore, section 269S (1) stipulates that the TCO comes into force on the day the application for the TCO was lodged. The TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the date of registration, except as it may affect the rights of importers.
In terms of consequences for breach, the Act does not specify any criminal or civil penalties for failing to comply with the TCO provisions. However, if a person believes that they have been adversely affected by a TCO, they could potentially challenge the decision in a court of law or through another legal process. The primary impact of non-compliance would likely be financial, as importers might not receive the tariff benefits they expected if the TCO is found to be invalid. The lack of specified penalties underscores the importance of ensuring that all applications for TCOs are thoroughly assessed and justified to avoid any legal challenges or disputes.