EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933064
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.
Xstrata Technology Pty Ltd applied for a TCO in respect of certain horizontal stirred grinding mill parts on 07 September 2009.
Instrument
TCO No 0933064 was made on 27 November 2009. It declares that those certain horizontal stirred grinding mill 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. 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. 0933064 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 Tariff Concession Instrument No. 0933064, made under the Customs Act 1901, was enacted to address the need for concessional tariffs on certain goods that are not produced in Australia, thereby supporting Australian industries and ensuring competitive pricing for imported goods. The instrument, issued by the Chief Executive Officer of Customs, was made in response to an application by Xstrata Technology Pty Ltd for tariff concessions on specific horizontal stirred grinding mill parts. The legislation aims to provide tariff relief on goods that have no substitutable Australian-made alternatives, as per section 269C of the Act. The process involved publishing a notice in the Gazette inviting submissions, although none were received. The instrument took effect on the date the application was lodged, 07 September 2009, and ensures that it does not disadvantage existing rights or impose new liabilities on persons other than the Commonwealth, while allowing importers to apply for duty refunds on affected goods imported since the effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to entities or individuals who wish to apply for a TCO in relation to goods that are not subject to the exclusions specified in section 269SJ of the Act. The Act mandates that a TCO can be granted if the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in sections 269C, 269D, 269E and 269F of the Act. The scope of the Act is national, as it is a Commonwealth Act, and it applies across Australia. There are no stated exclusions apart from those specified in section 269SJ. The application of the Act can be further defined through subordinate instruments, although no such instruments are mentioned in the provided text. The TCO in question, Instrument No. 0933064, was made for certain horizontal stirred grinding mill parts, which became subject to a free rate of duty as opposed to the general 5% duty.
Key Provisions
The primary operative sections of this legislation pertain to the making of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). Specifically, section 269C outlines the core criteria for approving a TCO application, while section 269P(3) mandates that the Chief Executive Officer of Customs (CEO) must issue a written TCO if these criteria are met. For instance, in the case of Xstrata Technology Pty Ltd, the CEO issued TCO No 0933064 on 27 November 2009, declaring that certain horizontal stirred grinding mill parts are subject to a tariff concession, thereby setting the duty rate at free instead of the general rate of 5%. This TCO came into force on 7 September 2009, the date the application was lodged, as stipulated in subsection 269S(1).
The Customs Act 1901 imposes several obligations on parties involved in the TCO process. The CEO must ensure that the application does not relate to goods specified in section 269SJ, which lists those ineligible for a TCO. Furthermore, the CEO must verify that no substitutable goods were produced in Australia on the application date, as defined by sections 269D, 269E, and 269F. In this case, the CEO confirmed that no such substitutable goods were produced. Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this instance, no submissions were received.
Regarding breaches and penalties, the Customs Act 1901 does not explicitly state civil or criminal penalties for non-compliance with the TCO process. However, misuse of a TCO or fraudulent applications could potentially lead to legal consequences under other sections of the Act or related legislation, such as penalties for fraud or misrepresentation. The Act ensures that the TCO does not disadvantage any person or impose liabilities on anyone other than the Commonwealth for actions taken before the TCO's effective date. Importers of the affected goods will benefit from the tariff concession, with the ability to apply for duty refunds on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.