EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101009
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.
Meridian Pty Ltd applied for a TCO in respect of certain ore concentrator floatation cell systems on 10 January 2011.
Instrument
TCO No 1101009 was made on 28 March 2011. It declares that those certain ore concentration floatation cell systems 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. 1101009 is taken to have come into force on 10 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 Australian Parliament, establishes a framework within which the Chief Executive Officer of Customs may issue Tariff Concession Orders (TCOs). These orders provide for a reduced rate of customs duty on specified goods, a mechanism designed to support Australian industries by making certain imported goods more competitively priced. TCO No. 1101009, issued on 28 March 2011, grants a concession on certain ore concentrator floatation cell systems, reducing the duty from the general rate of 5% to free, effective from the date of the application on 10 January 2011. This concession was made after determining that no substitutable goods were produced in Australia, meeting the core criteria set out in section 269C of the Act. The issuance of this TCO is aimed at ensuring that importers are not disadvantaged and can benefit from the tariff reduction, while also aligning with the broader policy objective of fostering a competitive and sustainable domestic industry.
Scope and Application
The Tariff Concession Instrument No. 1101009 applies to the import of certain ore concentrator floatation cell systems, specifically those that are subject to the application made by Meridian Pty Ltd on 10 January 2011. The instrument is a direct application of Part XVA of the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specified goods. The scope of the Act extends to any individual or entity importing the specified goods, and the application of the TCO is determined by the Chief Executive Officer of Customs, provided the application meets the criteria set out in the Act. This legislation operates nationally under the Commonwealth jurisdiction. Notably, the Act excludes certain goods, as detailed in section 269SJ, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments as required. The commencement date of the TCO is deemed to be the date of the application, 10 January 2011, and it does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1101009 under the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCOs) for specific goods, which can result in a lower rate of customs duty. If an application for a TCO is made and the CEO is satisfied that it does not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs, the CEO must determine if the application meets the core criteria as outlined in section 269C. This involves assessing whether there were any substitutable goods produced in Australia at the time of the application, as defined by sections 269D and 269E. If the CEO confirms that no substitutable goods were produced in Australia, they are required to make a written order that specifies the goods subject to the TCO and the corresponding rate of duty, as indicated in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO must publish a notice in the Gazette once an application is accepted, inviting any interested parties to submit reasons why the TCO should not be made (section 269K(1)). The CEO must also ensure that the application meets the criteria outlined in section 269C before making a decision. Furthermore, under the Regulations (paragraph 126(1)(r)), importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force.
Failure to comply with the provisions of the Customs Act 1901 and its associated regulations can lead to various consequences. Although the explanatory statement does not specify exact penalties, breaches of customs regulations can typically result in civil or criminal penalties. Civil penalties may include fines, while criminal penalties can range from fines to imprisonment, depending on the severity of the breach. The exact penalties would be determined in accordance with the relevant sections of the Act and other applicable laws. The TCO itself does not impose any new liabilities on individuals or entities but provides a benefit by potentially reducing customs duty on the specified goods.