EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100244
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.
Karara Iron One Project Pty Ltd applied for a TCO in respect of certain dual wagon tipper parts on 4 January 2011.
Instrument
TCO No 1100244 was made on 28 March 2011. It declares that those certain dual wagon tipper 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. 1100244 is taken to have come into force on 4 January 2011.
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 and excise through the application of tariffs and duties. Among its provisions, Part XVA of the Act facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The intent behind this legislative instrument is to enable tariff reductions on specific goods under certain conditions, thereby encouraging trade and investment by reducing the cost burden on importers. Instrument No. 1100244, issued on 28 March 2011, exemplifies this process, granting tariff concessions on certain dual wagon tipper parts as applied for by Karara Iron One Project Pty Ltd. The policy objective, as reflected in the explanatory statement, is to support Australian industry by reducing the duty on specific goods, ensuring they are competitively priced relative to imported alternatives, and facilitating their use in domestic production processes.
Scope and Application
The Tariff Concession Instrument No. 1100244, issued under the Customs Act 1901, pertains to a specific application by Karara Iron One Project Pty Ltd for a Tariff Concession Order (TCO) in respect of certain dual wagon tipper parts. The TCO applies to the specified goods and provides for a lower rate of customs duty as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the general duty rate of 5% to free. This Act applies to entities and individuals involved in the importation of the specified goods, particularly those importing dual wagon tipper parts, within the Commonwealth of Australia. The legislation ensures that no person, other than the Commonwealth, is disadvantaged or subjected to liabilities for actions taken prior to the registration of the TCO, while also allowing importers to apply for duty refunds for goods imported since the TCO was taken to have come into force. The scope of the Act is limited to the specific goods mentioned in the application and does not extend to other goods, unless explicitly stated in subordinate instruments.
Key Provisions
The Customs Act 1901, specifically within Part XVA, establishes a framework whereby the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the CEO for a TCO concerning certain goods. If the CEO is convinced that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs, the CEO must then assess whether the application fulfils the core criteria as outlined in section 269C. This requires a determination that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was submitted. Definitions for key terms such as “substitutable goods” and “ordinary course of business” are provided in sections 269D, 269E, and 269F of the Act.
For entities and individuals affected by the Act, the obligations are centred around the application and assessment of TCOs. The CEO has a duty under subsection 269K(1) to publish a notice in the Gazette when accepting a TCO application as valid, inviting any interested parties to submit any objections. If no objections are received, the CEO must proceed to issue a TCO if the application meets the core criteria. Additionally, the CEO must ensure that the rights of any person, other than the Commonwealth, are not adversely affected by the issuance of the TCO. Importers of the goods subject to the TCO can benefit from applying for a refund of any duty paid on those goods since the TCO came into effect, as per Regulation 126(1)(r).
The Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, non-compliance with the Act’s provisions generally could lead to legal consequences under broader sections of the Customs Act or associated regulations. The focus of the Act is on facilitating the application and implementation of TCOs, ensuring that the process is transparent and that the rights of all parties are protected. This means that while specific penalties are not outlined in the TCO itself, breaches of the broader Customs Act could result in substantial fines or other legal actions.