EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1004320
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 applied for a TCO in respect of certain calcined alumina powder fluid bed coolers on 22 January 2010.
Instrument
TCO No 1004320 was made on 16 April 2010. It declares that those certain calcined alumina powder fluid bed coolers 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. 1004320 is taken to have come into force on 22 January 2010.
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. 1004320 was enacted in 2010 under the Customs Act 1901 to address the need for tariff concessions for specific imported goods, in this case calcined alumina powder fluid bed coolers, by providing a lower rate of customs duty. This was achieved through the issuance of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs, who is mandated to assess applications against core criteria to determine if a TCO should be granted. This legislative instrument was developed in response to an application by Rio Tinto Aluminium, aiming to ensure that such imports are not subject to higher tariffs and to facilitate trade efficiency by reducing import costs. The instrument was enacted by the Australian Government, with the policy objective being to support economic activity by ensuring that certain imported goods are not subjected to prohibitively high customs duties, thus encouraging competitive import practices and aiding businesses that rely on importing specific goods for their operations.
Scope and Application
The Tariff Concession Instrument No. 1004320, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely calcined alumina powder fluid bed coolers, and concerns the application of a tariff concession order (TCO) made by the Chief Executive Officer of Customs (CEO). This instrument facilitates the reduction or elimination of customs duty on these goods. The legislation applies to any entity or person involved in the importation of these goods, and its geographic reach is national, as it pertains to the application of the Customs Act 1901 across Australia. The TCO does not impose any new liabilities or disadvantages to persons other than the Commonwealth and does not affect rights accrued before the date of the instrument's registration. Exemptions are outlined in section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The application of the TCO is further extended or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of this legislation concern the making and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F outlines the application process for a TCO, whereby a person may apply to the Chief Executive Officer (CEO) of Customs for a lower rate of customs duty on certain goods (269F). The CEO must then determine if the application meets the core criteria, such as whether no substitutable goods were produced in Australia on the day the application was lodged (269C). If the CEO is satisfied, they must make a written order (269P(3)). Section 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. The TCO comes into force on the day the application was lodged (269S(1)).
Under this Act, the CEO has the obligation to assess applications for TCOs and decide whether they meet the core criteria (269C, 269F). They must also publish a notice in the Gazette inviting submissions from interested parties (269K(1)). The Act imposes on applicants the requirement to submit valid applications that meet the criteria set out in section 269C. It is also required that no substitutable goods were produced in Australia on the day of the application (269C). Any person who submits a response to the CEO's notice must provide reasoned arguments against the TCO if they consider it should not proceed (269K(1)).
In terms of consequences for breach, the legislation does not explicitly outline specific offences, penalties, or consequences for non-compliance with its provisions. However, the Act does imply that failure to comply with the requirements for making a valid TCO application could result in the CEO declining the application. Additionally, if a TCO is made in error or if there is fraud in the application process, there could be implications for the applicant in terms of duty refunds or liabilities, though these are not detailed in the explanatory statement. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO (269S(1)).