EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1054638
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 gear and pinion wheel motor dump truck parts on 14 December 2010 .
Instrument
TCO No 1054638 was made on 7 March 2011. It declares that those certain gear and pinion wheel motor dump truck 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. 1054638 is taken to have come into force on 14 December 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. 1054638, enacted in 2011, amends the Customs Act 1901 by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). This instrument addresses the problem of high customs duty rates on specific goods by providing lower rates, aiming to make imports more competitive and accessible. The Tariff Concession Orders scheme under the Customs Act enables the CEO to lower the customs duty on certain goods, provided that no substitutable goods are produced in Australia. The primary policy objective is to foster economic efficiency and reduce costs for importers by providing tariff relief where appropriate.
The enacting body for this legislation is the Australian Parliament, which established the framework for TCOs under the Customs Act 1901 to ensure that the Australian market can access necessary goods at reduced tariff rates. This initiative aims to support businesses by lowering the cost of importing specific goods, thereby encouraging trade and economic activity. The Tariff Concession Order No. 1054638, in particular, applies to certain gear and pinion wheel motor dump truck parts, setting their duty rate to free, which significantly benefits importers by reducing their overall costs.
Scope and Application
The Tariff Concession Instrument No. 1054638 applies to specific gear and pinion wheel motor dump truck parts, as per an application submitted by Bucyrus Mining Australia Pty Ltd to the Chief Executive Officer of Customs (CEO) under the Customs Act 1901. The application was processed and approved based on the criteria that no substitutable goods were produced in Australia at the time of the application, leading to the issuance of the Tariff Concession Order (TCO) on 7 March 2011. This order exempts the specified goods from the general rate of duty, effectively setting the duty rate at free. The scope of this legislation is limited to the particular goods mentioned in the application, and it operates within the jurisdiction of the Commonwealth as per the Customs Act 1901. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Order No. 1054638, made under section 269F of the Customs Act 1901, pertains to the concession of customs duty for certain gear and pinion wheel motor dump truck parts. This order was issued in response to an application by Bucyrus Mining Australia Pty Ltd, dated 14 December 2010. Under section 269P(3) of the Act, the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia at the time the application was made, thereby meeting the core criteria as outlined in section 269C. Consequently, the CEO issued a written order, effective from 14 December 2010, which provides that these specific goods are subject to a zero rate of customs duty, down from the general rate of 5% as specified in the Customs Tariff Act 1995.
The obligations under this Act, as highlighted in section 269K(1), include the requirement for the CEO to publish a notice in the Gazette, inviting any person who may have an interest in opposing the order to lodge a submission. In this instance, no submissions were received, thereby facilitating the issuance of the TCO. Furthermore, section 269S(1) stipulates that the TCO is effective from the date the application was lodged, ensuring that the rights of the parties involved, particularly importers, are protected and that no retroactive liabilities are imposed.
In terms of enforcement and compliance, the Customs Act 1901 does not explicitly outline specific offences or penalties for breach of a Tariff Concession Order. However, the general legislative framework under which the Act operates implies that any non-compliance with the conditions of the TCO could potentially lead to civil or criminal penalties as outlined in other sections of the Act or related legislation. The precise nature of these penalties would depend on the specific breach and the relevant provisions of the Act or other applicable laws.
Overall, the Tariff Concession Order No. 1054638 represents a procedural measure designed to benefit importers by reducing the duty on certain goods, provided that the criteria for concession are met. The process for issuing such an order, including the requirement for public notice and the absence of retroactive application, ensures transparency and fairness in the application of customs duty concessions.