EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021799
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.
Bucyrus Mining Australia Pty Ltd applied for a TCO in respect of certain mechanical shovel or excavator or shovel loader parts on 14 May 2010.
Instrument
TCO No 1021799 was made on 26 July 2010. It declares that those certain mechanical shovel or excavator or shovel loader parts 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. 1021799 is taken to have come into force on 14 May 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. 1021799, enacted in 2010, is an instrument made under the Customs Act 1901. It was introduced to provide tariff concessions for certain mechanical shovel or excavator or shovel loader parts, reducing the customs duty rate for these goods from the general rate of 5% to free, following an application by Bucyrus Mining Australia Pty Ltd. This instrument was created to address the gap in the Customs Act 1901 by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders that provide lower rates of customs duty for specific goods. The objective, as stated in the Act, is to ensure that a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business. The instrument was published in the Gazette with no submissions received against it, and it came into force on the day the application was lodged, 14 May 2010, without affecting the rights of any person or imposing any liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods that are subject to a lower rate of customs duty. The application for such orders can be made by any person who believes that the goods they are concerned with meet the core criteria outlined in the Act. The primary criterion is that the goods must not have substitutable equivalents produced in Australia at the time the application is lodged. If the CEO determines that the application is valid and meets the core criteria, they are mandated to issue a TCO, which specifies the reduced duty applicable to the goods. The TCO applies nationally across Australia and affects the rights of importers by allowing them to claim refunds for duties paid on these goods since the date the TCO is deemed to have come into effect. It is important to note that this order does not retroactively affect the rights or impose liabilities on any person for actions taken prior to the TCO's effective date. Additionally, the CEO is required to publish the application in the Gazette, inviting any interested parties to submit objections, though no submissions were received in the case of TCO No. 1021799.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to this Tariff Concession Order (TCO) include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. Under section 269C, a TCO application is considered valid if the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that an application meets the core criteria, they must issue a written TCO order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. In this case, TCO No. 1021799 applies to certain mechanical shovel or excavator or shovel loader parts, reducing their duty rate from 5% to free.
The obligations imposed by the Act on the CEO of Customs include accepting valid TCO applications and publishing a notice in the Gazette inviting submissions from any interested parties. If no objections are received, the CEO must then issue a TCO. The Act also requires that a TCO be deemed to come into effect on the day the application is lodged. In addition, the CEO must ensure that TCOs do not adversely affect the rights of any person other than the Commonwealth or impose liabilities on them regarding actions taken before the TCO's registration.
Under the Customs Act 1901, there are no specific offences or penalties for breaches directly related to the TCO process itself. However, if an individual or entity fails to comply with the conditions of a TCO or engages in fraudulent activities related to the importation or duty payment of the specified goods, they may be subject to general penalties under the Customs Act. These could include civil penalties, fines, or criminal prosecution, depending on the severity and intent of the breach. The maximum penalties can vary but may include substantial fines and imprisonment for serious offences.