EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117018
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 gearcase assemblies on 30 May 2011.
Instrument
TCO No 1117018 was made on 19 August 2011. It declares that those certain gearcase assemblies 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. 1117018 is taken to have come into force on 19 August 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. 1117018, enacted under the Customs Act 1901, was introduced to address the need for concessional tariffs on specific imported goods. This instrument was developed to facilitate tariff reductions on certain gearcase assemblies, in response to an application by Bucyrus Mining Australia Pty Ltd. The purpose of this legislation is to allow the Chief Executive Officer of Customs to grant tariff concessions on goods where no substitutable goods are produced in Australia. The instrument was created to ensure that the application of the concession does not disadvantage any person or impose liabilities on them for actions taken before the concession was implemented.
The Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for the administration of customs and excise. Section 269F of the Act allows for applications to the CEO for tariff concession orders, which must meet core criteria outlined in the Act. In this case, the CEO determined that the application for certain gearcase assemblies met these criteria as no substitutable goods were produced in Australia. The instrument was published in the Gazette with no submissions received in opposition, and it came into force on the date the application was lodged, 19 August 2011. This concession benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the concession's effective date.
Scope and Application
The Tariff Concession Instrument No. 1117018, issued under the Customs Act 1901, applies to a specific entity, Bucyrus Mining Australia Pty Ltd, and pertains to certain gearcase assemblies for which a Tariff Concession Order (TCO) has been granted. This Act, specifically part XVA, enables the Chief Executive Officer of Customs to issue TCOs that lower the rate of customs duty on specified goods, provided certain criteria are met. The application for such concessions must not relate to goods excluded under section 269SJ and must meet the core criteria outlined in section 269C of the Act. The geographic reach of this legislation is national, as it falls under the Commonwealth's authority. The TCO is effective from the date the application was lodged, which in this case was 19 August 2011, and the duty on the specified gearcase assemblies is reduced from the general rate of 5% to free duty. Notably, the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth for actions taken before the registration date. The rights of importers are positively affected, as they can apply for a refund of duty on the specified goods imported since the effective date of the TCO.
Key Provisions
The key sections of the Customs Act 1901 that govern Tariff Concession Orders (TCOs) include section 269F, which allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO, and section 269C, which sets out the core criteria that must be met for an application to be approved. Section 269P(3) mandates that if the CEO is satisfied that an application meets the core criteria, they must issue a written order (a TCO) specifying that the goods in question are subject to a particular item of Schedule 4 to the Customs Tariff Act 1995. In this case, TCO No. 1117018, which was made on 19 August 2011, declares that certain gearcase assemblies are subject to item 50 of Schedule 4, with a duty rate of free, down from the general rate of 5%.
Entities or individuals who wish to apply for a TCO must do so under section 269F of the Act. The CEO must determine whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, they must make a TCO. The CEO is also required to publish a notice in the Gazette, as stipulated in subsection 269K(1) of the Act, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, no submissions were received.
If an application for a TCO is approved, the order comes into effect on the day the application was lodged, in accordance with subsection 269S(1) of the Act. TCO No. 1117018 is taken to have come into force on 19 August 2011. The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected as they will be able to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
There are no specific offences, penalties, or civil/criminal consequences outlined in the text for breach of the provisions of the Customs Act 1901 as they relate to TCOs. However, any breach of the Customs Act 1901 could potentially lead to civil or criminal penalties, depending on the nature and severity of the breach. The maximum penalties for breaches of the Customs Act 1901 can vary widely, and may include fines, imprisonment, or both, depending on the specific offence and the circumstances surrounding it.