EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101010
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 filter presses on 10 January 2011.
Instrument
TCO No 1101010 was made on 28 March 2011. It declares that those certain ore concentrator filter presses 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. 1101010 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 Parliament of Australia, introduces a scheme under which Tariff Concession Orders (TCOs) can be made to provide tariff concessions for specific goods. This scheme addresses the need to lower customs duties on certain imported goods where no substitutable domestic products exist. The Act empowers the Chief Executive Officer of Customs to make these orders, provided the application meets core criteria, such as the absence of substitutable goods produced in Australia. This mechanism aims to support industries by reducing costs on imported goods, thus encouraging trade and economic activity. The policy objective is to ensure that the Australian market remains competitive while fostering domestic industry where possible. Instrument TCO No. 1101010, which was made on 28 March 2011, exemplifies this process by granting a tariff concession on certain ore concentrator filter presses, reducing the duty from 5% to free, effective from the date the application was lodged on 10 January 2011.
Scope and Application
The Tariff Concession Instrument No. 1101010 applies to specific goods, in this case certain ore concentrator filter presses, as identified by Meridian Pty Ltd. It falls under the purview of the Customs Act 1901, particularly Part XVA, which governs the scheme for Tariff Concession Orders (TCOs). This instrument is designed to benefit entities that import these goods by applying a lower rate of customs duty, specifically bringing the duty rate down to free from the general rate of 5%. The instrument is effective across the Commonwealth of Australia, impacting importers who bring these goods into the country. Notably, the instrument excludes any rights or liabilities affecting persons other than the Commonwealth as of the date of registration, ensuring that no pre-existing rights or obligations are adversely affected by the TCO. The instrument also extends its application through subordinate instruments, as referenced in section 269S of the Act, ensuring that the terms and conditions of the concession are properly implemented and monitored.
Key Provisions
The key operative sections of this legislation focus on the process and criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided that the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must then determine whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these conditions are satisfied, the CEO must make a written order (section 269P(3)) that applies a prescribed rate of duty from Schedule 4 to the Customs Tariff Act 1995 to the goods in question.
The obligations imposed by the Act on parties and entities primarily rest on the CEO of Customs. The CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ and must verify that the core criteria outlined in section 269C have been met before making the TCO. This includes confirming that no substitutable goods were produced in Australia at the time the application was lodged. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to lodge submissions if they believe the TCO should not proceed, although in this case, no submissions were received.
Offences, penalties, or consequences for breaches of this legislation are not explicitly detailed in the explanatory statement. However, the TCO itself provides relief from duty for specified goods and does not impose any new liabilities on any person, including importers. Importers may benefit by applying for a refund of duty on goods imported since the TCO was taken to have come into force, as per paragraph 126(1)(r) of the Regulations. The TCO also does not affect the rights of any person (other than the Commonwealth) as at the date of registration in a manner that would disadvantage them or impose liabilities for actions taken before the date of registration. Therefore, while specific penalties for breaches are not outlined, the primary focus of the legislation is on providing tariff relief in a structured and transparent manner.