EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1056465
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.
Rio Tinto Aluminium Ltd applied for a TCO in respect of certain chlorinated sea water pump manifolds on 30 December 2010.
Instrument
TCO No 1056465 was made on 28 March 2011. It declares that those certain chlorinated sea water pump manifolds 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. 1056465 is taken to have come into force on 30 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 Customs Act 1901 was enacted to facilitate the regulation of imports and exports in Australia, providing a structured approach to managing customs duties, including the establishment of a scheme for Tariff Concession Orders (TCOs) under Part XVA. This scheme allows the Chief Executive Officer of Customs to reduce customs duties on specific goods through TCOs, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative framework was designed to address the need for tariff concessions that promote economic efficiency and competitiveness in the Australian market. The instrument, Tariff Concession Instrument No. 1056465, was introduced to provide relief on customs duties for certain chlorinated sea water pump manifolds, responding to an application by Rio Tinto Aluminium Ltd. The policy objective, as outlined in the Act, is to ensure that tariff concessions are granted fairly and only when appropriate, thereby supporting the broader economic interests of Australia while facilitating legitimate trade practices.
Scope and Application
The Tariff Concession Instrument No. 1056465 applies to the specific category of goods known as chlorinated sea water pump manifolds, which are subject to the Customs Act 1901. The instrument was enacted to address an application submitted by Rio Tinto Aluminium Ltd on 30 December 2010, and it came into force on the same date. The primary purpose of this legislation is to provide tariff concessions for these goods, effectively reducing the duty rate from the general rate of 5% to free of charge, thereby benefiting importers. The instrument ensures that no existing rights or liabilities of any person, except the Commonwealth, are adversely affected or imposed retroactively. Additionally, the Customs Act 1901, under which this instrument operates, extends its reach across the Commonwealth of Australia, ensuring a consistent application of customs duties and concessions nationally.
Key Provisions
The Tariff Concession Instrument No. 1056465, established under the Customs Act 1901, primarily pertains to the process and criteria for granting Tariff Concession Orders (TCOs). According to section 269F, an application for a TCO can be submitted by any person to the Chief Executive Officer (CEO) of Customs. If the CEO determines that the goods in question do not fall under the prohibitions outlined in section 269SJ, the application must be assessed against the core criteria specified in section 269C. This section stipulates that a TCO can be granted if no substitutable goods were produced in Australia at the time the application was lodged, as defined in sections 269D and 269E of the Act.
The obligations imposed by this Act require the CEO to meticulously evaluate the application to ensure it meets these core criteria. The CEO must make a written order if satisfied that the application complies with the specified conditions, as outlined in section 269P(3). This involves confirming that the goods in question are not substitutable by any Australian-produced goods and that they meet the requirements set forth in Schedule 4 of the Customs Tariff Act 1995. In the case of TCO No. 1056465, the CEO granted a concession for certain chlorinated sea water pump manifolds, resulting in a duty-free status for these goods.
Failure to comply with the provisions of the Customs Act 1901, particularly in misrepresenting facts in a TCO application, can lead to serious consequences. The Act does not explicitly detail specific offences or penalties within the explanatory statement; however, it is understood that breaches could potentially incur penalties under the broader legal framework. This might include fines or imprisonment, depending on the severity and intent behind the breach. The Act mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as per section 269K(1). The lack of submissions in response to such a notice, as in the case of TCO No. 1056465, may streamline the process but does not exempt the CEO from ensuring all legal criteria are met.
The commencement of the TCO, as specified in section 269S(1), is effective from the date the application was lodged, which in the case of TCO No. 1056465 is 30 December 2010. Importantly, the TCO does not adversely affect the rights of any person, except for the Commonwealth, nor does it impose any liabilities on individuals for actions taken prior to the TCO's effective date. Importers stand to benefit from this concession, particularly through the potential for duty refunds on imports made since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.