EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0935315
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 applied for a TCO in respect of certain horizontal stirred grinding mill parts on 18 September 2009.
Instrument
TCO No 0935315 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. 0935315 is taken to have come into force on 18 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. 0935315, issued under the Customs Act 1901, was enacted in 2009 to address the need for tariff concessions on specific imported goods, in this case, certain horizontal stirred grinding mill parts. This legislation aims to provide relief from customs duties for goods that are not produced domestically or have no suitable Australian-made substitutes. The instrument was created following an application by Xstrata Technology, which sought to lower the tariff on the specified mill parts from the general rate of 5% to a rate of zero. The Chief Executive Officer of Customs, after verifying that no substitutable goods were produced in Australia, issued the concession, effective from the date the application was lodged, 18 September 2009. The policy objective of this instrument is to facilitate the importation of goods that are essential for industry but not produced domestically, thus benefiting importers by potentially allowing them to claim refunds on duties paid prior to the concession’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0935315 under the Customs Act 1901 applies to a specific entity, Xstrata Technology, and to the goods it imports, namely certain horizontal stirred grinding mill parts. The instrument is designed to provide tariff concessions by applying a lower rate of customs duty on these goods. The scope of the Act includes individuals or entities that apply for and meet the core criteria for a Tariff Concession Order (TCO) as outlined in the Act. The Act applies to transactions involving the importation of goods, specifically those that do not have substitutable goods produced in Australia, as determined by the Chief Executive Officer of Customs. The geographic reach of the Act is national, applying across Australia under the Commonwealth's jurisdiction. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which are ineligible for TCOs. The application of the Act can be extended or restricted through subordinate instruments, although the specific TCO No. 0935315 does not indicate any further extensions or restrictions beyond what is stated in the explanatory statement.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCO) under Part XVA of the Customs Act 1901 (section 269C, 269B, 269D, 269E, and 269P). Section 269C sets out the core criteria for a TCO application to be met, primarily requiring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies the meanings of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269D, 269E, and 269P provide further definitions and requirements related to the TCO process. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, a written TCO must be issued under section 269P(3).
The obligations imposed on parties under this legislation include ensuring that TCO applications are made in accordance with the criteria set out in section 269C. The CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties if a TCO application is accepted as valid (subsection 269K(1)). The CEO must also decide whether to make a TCO if the application meets the core criteria. Additionally, importers are required to apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.
Breaches of the obligations or requirements under this legislation may result in civil or criminal consequences. However, the explanatory statement does not specify any offences, penalties, or consequences for breach. It is likely that any breaches would be subject to general legal principles and other relevant legislation, which could include fines, imprisonment, or other civil remedies depending on the nature and severity of the breach.