EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1049593
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.
Cumi Australia Pty Ltd applied for a TCO in respect of certain parts for a hydrocyclone mineral separator on 09 November 2010.
Instrument
TCO No 1049593 was made on 07 February 2011. It declares that those certain parts for a hydrocyclone mineral separator 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. 1049593 is taken to have come into force on 09 November 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 Australian Parliament, provides a framework for the regulation of customs and excise in Australia. The Act was introduced to address the need for a structured approach to the management of customs duties and the importation and exportation of goods. Part XVA of the Act introduces the concept of Tariff Concession Orders (TCOs), which allow for the application of reduced or free customs duty on specified goods under certain conditions. Tariff Concession Instrument No. 1049593 was introduced to provide tariff concessions on certain parts for a hydrocyclone mineral separator, reducing the duty from 5% to free. This concession was granted after the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria outlined in section 269C of the Act. The instrument became effective from the date the application was lodged, 9 November 2010, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 1049593, applies to specific goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. The Act facilitates tariff concessions for goods not produced in Australia, providing lower customs duty rates. The instrument applies to the parts for a hydrocyclone mineral separator, which are now subject to a duty rate of free, down from the general rate of 5%. The instrument is effective from the date the application was lodged, 09 November 2010, and it does not affect any rights or impose liabilities on any person except the Commonwealth. Exemptions or exclusions are determined by section 269SJ of the Act, which outlines goods ineligible for TCOs. The CEO is required to consider submissions from the public before making a decision on a TCO application, although in this case, no submissions were received. The application of the TCO can be further extended or restricted through subordinate instruments, ensuring that the scheme is managed in line with broader trade and customs policies.
Key Provisions
The Tariff Concession Instrument No. 1049593, made under section 269P of the Customs Act 1901 (the Act), provides a concessional rate of customs duty for certain parts of a hydrocyclone mineral separator. This instrument, which came into effect on 09 November 2010, declares that these parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the general duty rate of 5% to free duty. This concession is contingent on the Chief Executive Officer of Customs (the CEO) being satisfied that no substitutable goods were produced in Australia at the time the application was made, as stipulated in section 269C of the Act.
The obligations imposed on parties by this legislation primarily involve the requirement for an application to be submitted to the CEO for a Tariff Concession Order (TCO) if it is determined that the goods in question are eligible under the Act’s criteria. Specifically, section 269F mandates that an application must be made by a person to the CEO, and the CEO must then assess the application against the criteria outlined in sections 269B, 269C, and 269D of the Act. If the CEO is satisfied that the application meets the core criteria, they are required under section 269P to make a TCO, specifying the prescribed item of Schedule 4 to the Tariff that applies to the goods.
Failure to comply with the requirements set forth by this Act may result in legal consequences. Although the Act does not explicitly state the penalties for non-compliance, breaches of customs regulations generally carry significant civil and criminal penalties under the Customs Act 1901. These can include fines up to a substantial amount and potential imprisonment for serious violations, as detailed in other relevant sections of the Act and associated regulations. Importers, however, are afforded the right to apply for a refund of any duty paid on the goods since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.
The CEO’s role includes the responsibility to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made, as per subsection 269K(1). In this case, no submissions were received. The Act ensures that the rights of individuals, apart from the Commonwealth, are not adversely affected by the TCO, and it explicitly states that the TCO does not impose any liabilities on any person, thus protecting the interests of those who may be affected by the tariff changes.