EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1104263
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 dump truck parts on 28 January 2011.
Instrument
TCO No 1104263 was made on 18 April 2011. It declares that those certain 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. 1104263 is taken to have come into force on 28 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 Tariff Concession Instrument No. 1104263, enacted in 2011, addresses the issue of providing tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders under the Customs Act 1901. The Act was introduced to streamline the process of granting tariff relief for goods that are not produced in Australia, thereby encouraging importation and potentially benefiting consumers by reducing the cost of certain goods. This instrument was issued by the CEO following an application from Bucyrus Mining Australia Pty Ltd for tariff concessions on certain dump truck parts, in line with the policy objectives outlined in the Customs Act.
The CEO determined that the application met the core criteria, specifically that no substitutable goods were produced in Australia, allowing for a tariff concession to be granted. The instrument, which came into force on the date of the application (28 January 2011), ensures that the rights of importers are positively affected, as they can now apply for a refund of duty on these goods since the commencement date. Importantly, the Tariff Concession Order does not impose any new liabilities on any person and does not disadvantage any existing rights as of the date of registration.
Scope and Application
The Customs Act 1901 applies to the regulation of customs duties and tariff concessions in Australia, overseen by the Chief Executive Officer of Customs. This Act enables the creation of Tariff Concession Orders (TCOs) to lower customs duty rates for specific goods, provided certain criteria are met. An application for a TCO must be made by a person and must not pertain to goods that cannot be subject to a TCO as outlined in section 269SJ. The application is assessed against the core criteria, particularly whether there are no substitutable goods produced in Australia at the time of application, as defined under sections 269C, 269D, 269E, and 269B of the Act. If these criteria are satisfied, a TCO is issued, effectively applying a prescribed tariff rate from the Customs Tariff Act 1995. The instrument, Tariff Concession Instrument No. 1104263, applies to specific dump truck parts and was issued following an application by Bucyrus Mining Australia Pty Ltd, with no objections received during the consultation period. The TCO came into force on the date the application was lodged, 28 January 2011, and while it does not affect existing rights or impose new liabilities, it does provide benefits such as the ability for importers to apply for duty refunds on qualifying goods.
Key Provisions
The key operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), include sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must then decide if the application meets the core criteria outlined 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 the application meets these criteria, the CEO is required to make a written order (TCO) under section 269P, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO will apply to goods from the date the application was lodged, as stipulated in section 269S.
Under this Act, the CEO has specific obligations and requirements. Firstly, upon receiving a valid TCO application, the CEO must publish a notice in the Gazette inviting any person who may have concerns about the TCO to lodge a submission. This is a mandatory step to ensure transparency and provide an opportunity for public input, as outlined in subsection 269K(1). Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities in respect of actions taken before the TCO was registered, as per subsection 269S(1).
The Customs Act 1901 imposes certain consequences for non-compliance with the requirements and obligations set forth within the Act. While the specific offences related to TCOs are not detailed in the provided explanatory statement, breaches of the Act generally may result in penalties. For example, subsection 271(1) of the Act provides that any person who contravenes any provision of the Act is liable to a penalty of up to $22,200 for an individual offence, or $111,000 for a continuing offence. Additionally, subsection 272(1) stipulates that any person who knowingly or recklessly makes a false or misleading statement in connection with any matter under the Act is liable to a penalty of up to $11,100 for an individual offence, or $55,500 for a continuing offence. These penalties reflect the seriousness with which the Act treats compliance with its provisions.