EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1044228
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.
Newlands Northern Underground Pty Ltd applied for a TCO in respect of certain underground mining roof support machine parts on 29 September 2010.
Instrument
TCO No 1044228 was made on 20 December 2010. It declares that those certain underground mining roof support machine 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. 1044228 is taken to have come into force on 29 September 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, establishes a framework for the regulation of customs duties and other import-related matters. One of the mechanisms introduced under this Act is the scheme for Tariff Concession Orders (TCOs), which allows for reduced customs duties on certain goods, subject to specific criteria. The Tariff Concession Instrument No. 1044228, made under this Act, addresses a specific need by providing tariff concessions to Newlands Northern Underground Pty Ltd for certain underground mining roof support machine parts. This instrument was introduced to alleviate the financial burden on the applicant by applying a zero rate of duty on these specific goods, as opposed to the general rate of 5%, thereby promoting economic efficiency and supporting industry competitiveness. The policy objective behind this concession is to ensure that Australian businesses, particularly those in niche sectors such as mining, can access critical components at a reduced cost, thus facilitating their operations and enhancing their global competitiveness.
Scope and Application
The Tariff Concession Instrument No. 1044228 applies to the specific goods identified in the instrument, which are certain underground mining roof support machine parts, and it is issued under the authority of the Customs Act 1901. This Act applies to any person or entity seeking a tariff concession order for goods that are not produced in Australia in the ordinary course of business, and where no substitutable goods are produced domestically. The instrument is applicable nationally across Australia, aligning with the overarching provisions of the Commonwealth Customs Act. It is important to note that this tariff concession does not extend to goods specified in section 269SJ of the Customs Act 1901, which lists those goods that are ineligible for tariff concessions. The instrument came into effect on the date the application was lodged, 29 September 2010, and does not disadvantage any person other than the Commonwealth or impose any liabilities on entities other than the Commonwealth for actions taken before the registration date. The instrument can be further extended or specified through subordinate instruments, which may include additional details or conditions for its application.
Key Provisions
The Tariff Concession Instrument No. 1044228 made under the Customs Act 1901 applies to certain underground mining roof support machine parts. Section 269F of the Act allows for an application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO), which can reduce the customs duty on specific goods. In this case, Newlands Northern Underground Pty Ltd applied for a TCO for the specified parts on 29 September 2010. The CEO, after determining that the application met the core criteria under section 269C, issued TCO No. 1044228 on 20 December 2010, which effectively declared that the specified goods would be subject to a free rate of duty instead of the general rate of 5%, as detailed in item 50 of Schedule 4 to the Customs Tariff Act 1995.
Under the Customs Act 1901, the CEO is obligated to consider whether the application for a TCO meets the core criteria, particularly if no substitutable goods were produced in Australia on the day the application was lodged, as stipulated in section 269C. Additionally, the CEO must publish a notice in the Gazette inviting any objections to the TCO, as required by subsection 269K(1). In this instance, no objections were received. Furthermore, section 269S(1) of the Act specifies that a TCO comes into force on the day the application is lodged, which for TCO No. 1044228 was 29 September 2010.
Entities and individuals subject to the Act must comply with the provisions outlined, ensuring that any application for a TCO is thoroughly assessed by the CEO. The CEO must verify that the application meets the specified criteria and that the goods in question do not have substitutable alternatives produced in Australia. The Act also requires the CEO to provide public notice of the application and allow for any submissions from interested parties. For this particular TCO, Newlands Northern Underground Pty Ltd would need to ensure that their application was made in accordance with the requirements of the Act and that all necessary information was provided to the CEO.
The Customs Act 1901 imposes certain consequences for non-compliance with its provisions. If a TCO is found to have been improperly granted or if there is evidence of fraudulent application, the CEO may revoke the TCO, and penalties may apply. Although specific penalties are not detailed in the Explanatory Statement, breaches of the Customs Act 1901 can generally result in significant fines and, in severe cases, criminal charges. The severity of penalties would depend on the nature and extent of the breach, with potential maximum penalties including substantial fines and imprisonment for individuals involved in serious or repeated violations.