EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0950588
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 pressure controlling regulators on 31 December 2009.
Instrument
TCO No 0950588 was made on 22 March 2010. It declares that those certain pressure controlling regulators 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. 0950588 is taken to have come into force on 31 December 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. 0950588, enacted in 2010 under the Customs Act 1901, was introduced to address the issue of ensuring that certain goods eligible for tariff concessions are not substituted by domestic production. This instrument allows the Chief Executive Officer of Customs to grant tariff concession orders for goods where no substitutable goods are produced in Australia in the ordinary course of business. The objective of this legislative measure is to encourage the importation of specific goods by providing a lower rate of customs duty, thereby promoting competition and potentially reducing costs for consumers and businesses. The instrument was made after considering an application from Rio Tinto Aluminium Ltd for certain pressure controlling regulators, and it specifies that these goods are subject to a duty-free rate as no substitutable goods are produced domestically. The process involves publishing a notice in the Gazette to invite submissions on the application, which in this instance, did not receive any. The instrument came into effect on the date the application was lodged, ensuring that the rights of importers are beneficially affected without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0950588 under the Customs Act 1901 applies specifically to the goods identified in the application made by Rio Tinto Aluminium Ltd, namely certain pressure controlling regulators. This instrument is targeted at entities involved in the importation of these specific goods, allowing them to benefit from a lower rate of customs duty as prescribed under the Customs Tariff Act 1995. The concession applies at a national level across Australia, as it is a Commonwealth Act, and it extends to any individual or entity importing these goods post the date of the application, which is 31 December 2009. The instrument is designed to provide relief where no substitutable goods are produced domestically, as required by section 269C of the Act. It is important to note that the Act does not cover goods specified in section 269SJ, which cannot be subject to a Tariff Concession Order. The application of this tariff concession does not affect existing rights or impose any liabilities on persons other than the Commonwealth, ensuring that the rights of importers are beneficially impacted, including the potential for duty refunds on imports since the effective date of the order.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0950588 (TCO No. 0950588) under the Customs Act 1901 (sections 269C, 269B, 269P(3), and 269S) establish the framework for tariff concessions on certain goods, specifically pressure controlling regulators in this case. The instrument was made by the Chief Executive Officer of Customs (CEO) on 22 March 2010, declaring that these goods are subject to a concession where the general rate of duty drops from 5% to free, following an application by Rio Tinto Aluminium Ltd. on 31 December 2009. The CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a tariff concession order (section 269C).
Entities and individuals governed by this Act are required to adhere to the provisions outlined in the Customs Act 1901 and the Customs Tariff Act 1995. Specifically, applicants for a tariff concession must ensure their applications meet the core criteria, which includes demonstrating that no substitutable goods are produced in Australia. The CEO must also ensure that a public notice is published in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received (subsection 269K(1)). The TCO itself is effective from the date the application was lodged, in this case, 31 December 2009 (subsection 269S(1)). Importers of the affected goods can apply for a refund of duty paid on imports made since this effective date.
Breaching the requirements of the Customs Act 1901 or any associated regulations can lead to various civil and criminal consequences. While the explanatory statement does not explicitly detail offences or penalties, the Customs Act 1901 generally provides for fines and imprisonment for breaches of its provisions. For example, providing false information in an application for a tariff concession could result in penalties under sections that deal with false statements or fraud. Additionally, failure to comply with the refund provisions could lead to financial penalties or legal action to recover unpaid duties. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in the broader Customs Act 1901.