EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944813
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.
BHP Billiton Olympic Dam Corporation Pty Ltd applied for a TCO in respect of certain flash furnace elements on 25 November 2009.
Instrument
TCO No 0944813 was made on 26 February 2010. It declares that those certain flash furnace elements 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. 0944813 is taken to have come into force on 25 November 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 Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on specified goods. The Act aims to provide a streamlined process for applying for tariff concessions, ensuring that the process is fair and transparent. TCO No. 0944813, issued on 26 February 2010, is an example of such an order, made in response to an application by BHP Billiton Olympic Dam Corporation Pty Ltd for certain flash furnace elements. This particular TCO was introduced to address the issue of applying for tariff concessions on goods not produced domestically, thereby ensuring the availability of competitive and cost-effective goods in the Australian market. The policy objective of the Act, as reflected in this TCO, is to facilitate the importation of goods that are not domestically produced, thus supporting trade and economic efficiency.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods, encompassing a wide range of industries and transactions where customs duties are relevant. Specifically, the Act allows the Chief Executive Officer of Customs to create Tariff Concession Orders, which can reduce the duty on certain goods, provided no substitutable goods are produced in Australia. This concession is available to any person who applies for it and meets the criteria outlined in the Act. The Act operates at a national level across Australia, as it is a Commonwealth law. It provides exemptions from the general tariff rates for specific goods, contingent upon the absence of Australian-made alternatives. The Act also allows for the extension or restriction of its application through subordinate instruments, ensuring that the concessions can be tailored to specific economic or policy needs. The Tariff Concession Orders themselves do not disadvantage any person and do not impose new liabilities on individuals or entities, only benefiting those who import the specified goods.
Key Provisions
The primary operative sections of the Customs Act 1901, relevant to Tariff Concession Orders (TCOs), are sections 269F, 269C, 269B, and 269P. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The application must be assessed under section 269C, which stipulates that a TCO will only be considered if no substitutable goods are produced in Australia in the ordinary course of business. The terms 'substitutable goods' and 'ordinary course of business' are defined by sections 269D and 269E respectively. If the CEO is satisfied that the application meets these core criteria, section 269P(3) mandates the CEO to issue a written TCO.
The Act imposes several obligations and requirements on both applicants and the CEO. For applicants, the primary requirement is to ensure that their application for a TCO is lodged in accordance with the provisions of section 269F. They must also ensure that their application meets the core criteria set out in sections 269C, 269B, and 269D. The CEO, on the other hand, must promptly assess the application, publish a notice in the Gazette inviting submissions (section 269K(1)), and decide whether to issue a TCO based on the criteria outlined in section 269C. Furthermore, the CEO must ensure that any TCO issued complies with the Act and its associated regulations.
The Customs Act 1901 and associated regulations do not explicitly outline specific offences, penalties, or consequences for breaches related to TCOs. However, general provisions within the Act and Customs Act 1995 likely apply, where breaches of customs laws can result in civil or criminal penalties. The maximum penalties for contravening customs laws can include substantial fines and, in some cases, imprisonment, depending on the severity of the breach. The specific penalties are determined by the courts and can vary based on individual circumstances and the nature of the offence.
In summary, section 269F allows applications for TCOs, while sections 269C and 269P(3) set out the criteria for the CEO to consider and the process for issuing a TCO. The Act requires applicants to meet specific criteria and the CEO to follow due process, including publishing notices in the Gazette and considering any submissions. While the Act does not detail specific penalties for TCO breaches, general customs law penalties may apply.