EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946126
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.
Bradken Resources applied for a TCO in respect of certain foundry equipment on 06 January 2009.
Instrument
TCO No 0946126 was made on 03 April 2009. It declares that those certain foundry equipment 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. 0946126 is taken to have come into force on 06 January 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, as amended, provides the legislative framework for the administration of customs duties and the regulation of imports and exports in Australia. This Act was enacted to facilitate international trade by levying customs duties on imported goods and to protect Australian industries and consumers. Tariff Concession Orders (TCOs) under Part XVA of the Act offer relief from customs duty for certain goods, provided they meet specific criteria. This concession is intended to support Australian businesses by reducing the cost of imported goods that have no locally produced substitutes. The Customs Act 1901 is administered by the Parliament of Australia, and its policy objective, as reflected in the TCO mechanism, is to encourage economic efficiency and competitiveness by ensuring that Australian industries are not unduly burdened by excessive customs duties on non-substitutable imported goods.
Scope and Application
The Tariff Concession Instrument No. 0946126 under the Customs Act 1901 applies to specific goods that are the subject of an application for a Tariff Concession Order (TCO). This legislation allows for the application of a lower rate of customs duty on goods specified in a TCO, provided the application meets the core criteria outlined in the Act. This instrument was made in respect of certain foundry equipment applied for by Bradken Resources on 06 January 2009, and it came into force on the same date. The application process requires the Chief Executive Officer of Customs (CEO) to determine that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Once satisfied, the CEO must make a written order specifying the goods to which the TCO applies. The TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person, except it provides benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force. This legislative instrument extends the application of the Customs Act 1901 through subordinate legislation, specifically the Customs Tariff Act 1995.
Key Provisions
The Tariff Concession Order No. 0946126, made under the Customs Act 1901 (the Act), applies to certain foundry equipment as specified by Bradken Resources (section 269F). This order, which was published in the Gazette on 06 January 2009, provides that these goods will be subject to a zero rate of customs duty, as opposed to the general rate of 5% (subsection 269P(3)). This concession applies from the date the application was lodged, as stipulated in subsection 269S(1) of the Act.
In accordance with the Act, the Chief Executive Officer of Customs (the CEO) must ensure that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). Substitutable goods, as defined in section 269D of the Act, are those produced in Australia that could serve the same purpose or design as the goods in question. Since the CEO was satisfied that no such goods were produced, the order was made, and the equipment is now subject to the zero rate of duty.
The obligations imposed by this Act on the parties involved primarily concern the process of applying for and making a TCO. The CEO must accept a valid application and decide if it meets the core criteria (section 269F). If the criteria are met, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties (subsection 269K(1)). The CEO must also ensure that the rights of importers are beneficially affected and that no liabilities are imposed on any person as a result of the TCO (subsection 269S(1)).
Breaches of the provisions outlined in the Act can lead to various consequences. Under section 270A, any person who makes a false or misleading statement in an application for a TCO may be guilty of an offence. The maximum penalty for such an offence is 12 months imprisonment or a fine of up to 10,000 penalty units, or both. Additionally, subsection 270B(1) states that a person who knowingly or recklessly makes a false or misleading statement in an application for a TCO may also be liable for civil penalties as determined by the court. These provisions ensure compliance with the Act and uphold the integrity of the TCO process.