EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014567
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.
Normet Asia Pacific Pty Ltd applied for a TCO in respect of certain underground mining and tunnelling scalers on 25 March 2010.
Instrument
TCO No 1014567 was made on 18 June 2010. It declares that those certain underground mining and tunnelling scalers 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. 1014567 is taken to have come into force on 25 March 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for managing customs duties and tariffs. Specifically, Part XVA of the Act introduces a scheme for Tariff Concession Orders (TCOs) that allows the Chief Executive Officer of Customs to apply reduced customs duty rates on certain goods. This mechanism was designed to address the problem of ensuring that Australian industries, particularly those in the manufacturing and processing sectors, remain competitive by reducing the cost of importing essential goods where local production does not meet the demand or is not feasible. The policy objective behind this provision is to foster economic growth by facilitating the import of necessary goods at a lower tariff rate, thereby supporting businesses and potentially reducing consumer prices.
In the case of Tariff Concession Order No. 1014567, Normet Asia Pacific Pty Ltd successfully applied for a concession on certain underground mining and tunnelling scalers. The CEO of Customs determined that these goods qualified for a tariff concession as no substitutable goods were being produced in Australia, aligning with the criteria outlined in section 269C of the Act. Consequently, the order, which came into force on 25 March 2010, provides for a free rate of duty on these scalers, as opposed to the general rate of 5%. This order not only benefits the rights of importers by potentially allowing them to claim refunds for duties paid on imports prior to the effective date of the TCO but also aligns with the broader objective of supporting Australian industries by making essential goods more affordable.
Scope and Application
The Tariff Concession Instrument No. 1014567 under the Customs Act 1901 applies to the specific goods, namely certain underground mining and tunnelling scalers, as applied for by Normet Asia Pacific Pty Ltd. The instrument is applicable to the import of these goods, which now benefit from a lower rate of customs duty, specifically zero percent, instead of the general rate of five percent. The instrument was made by the Chief Executive Officer of Customs upon determining that no substitutable goods were produced in Australia, thus meeting the core criteria stipulated in the Act. The geographic reach of this instrument is national, affecting customs duties across Australia. Notably, the instrument does not disadvantage any person or impose liabilities on anyone for actions taken before its registration, thus protecting the rights of those importing the goods. The instrument was published in the Gazette with an invitation for objections, none of which were received, and it came into effect on the date of the application, 25 March 2010.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 1014567 (TCO No 1014567) under the Customs Act 1901 involve the application and approval process for tariff concessions on certain underground mining and tunnelling scalers. The main sections relevant to this instrument include sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C outlines the criteria that must be met for such an application, specifically that no substitutable goods were produced in Australia at the time the application was lodged. Section 269P(3) states that if the CEO is satisfied the application meets these criteria, a TCO must be made. Section 269SJ specifies goods that cannot be subject to a TCO.
The obligations imposed by the Act on the parties governed by it include ensuring that the goods in question do not have substitutable goods produced in Australia at the time of application, and providing any necessary documentation and evidence to substantiate the application. The CEO, on the other hand, must follow the legislative requirements to evaluate the application, consider any submissions received, and make a written order if the application meets the criteria. Under section 269K(1) of the Act, the CEO must also publish a notice in the Gazette inviting any submissions on the application.
Any breach of the conditions set out in the Customs Act 1901 could lead to legal consequences. The penalties for non-compliance can include fines and imprisonment as stipulated by the relevant sections of the Customs Act 1901 and the Customs Regulations 1993. For instance, under section 245-25 of the Crimes Act 1914, a person who knowingly or recklessly makes a false statement or provides false information in an application for a tariff concession could be fined or imprisoned. The maximum penalties can vary depending on the specific offence, but they may include substantial fines and imprisonment terms that could range from a few months to several years, depending on the severity of the breach.