EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134549
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 mechanical seals on 13 October 2011.
Instrument
TCO No 1134549 was made on 04 January 2012. It declares that those certain mechanical seals 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. 1134549 is taken to have come into force on 13 October 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, provides for a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This scheme allows for the application of a lower rate of customs duty on goods specified in a TCO. This particular legislation, Tariff Concession Instrument No. 1134549, was introduced to address the specific needs of Bucyrus Mining Australia Pty Ltd in relation to certain mechanical seals, providing a tariff concession that alleviates the duty burden on these goods. The policy objective, as outlined in the Act, is to ensure that such concessions are granted when no substitutable goods are produced in Australia, thereby encouraging the importation of specific goods that are not domestically manufactured. This measure aims to support particular industries by making imported goods more competitively priced, without imposing any disadvantage or liability on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 1134549 under the Customs Act 1901 applies to Bucyrus Mining Australia Pty Ltd and specifically to certain mechanical seals. This Act, which operates at the Commonwealth level, provides a mechanism for tariff concessions that can be applied to goods where certain criteria are met, notably that no substitutable goods are produced in Australia. The instrument was made on 4 January 2012, declaring that the mechanical seals in question are to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free, as opposed to the general rate of 5%. The process for granting such concessions involves an application to the Chief Executive Officer of Customs, who must be satisfied that the application meets core criteria, and involves a period for public consultation as stipulated in the Act. The commencement date for the application of this Tariff Concession Order is considered to be the day on which the application was lodged, 13 October 2011, and it does not affect the rights of any person adversely nor impose liabilities on anyone in respect of actions taken before the date of registration.
Key Provisions
The main operative sections of this legislation revolve around the creation, application, and enforcement of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for specific goods, provided these goods do not fall under the exclusions outlined in section 269SJ. If the CEO is satisfied that the application meets the core criteria stipulated in section 269C, they are required to make a TCO, which is documented in writing (section 269P(3)). This written order, or TCO, specifies that the goods in question are subject to a prescribed rate of duty under Schedule 4 to the Customs Tariff Act 1995, as indicated in the TCO. For example, in the case of TCO No. 1134549, certain mechanical seals are subject to a free rate of duty as opposed to the general rate of 5%.
The Act imposes specific obligations on the CEO of Customs, who must ensure that applications for TCOs are processed according to the criteria set out in section 269C. This includes verifying that no substitutable goods, as defined in section 269D, are produced in Australia at the time of application. The CEO is also required to publish a notice in the Gazette (subsection 269K(1)) inviting public submissions on the proposed TCO. Additionally, the Act ensures that the TCO does not retroactively affect the rights of any person, including importers who can apply for a refund of duty paid on goods imported since the TCO was taken to have come into force (paragraph 126(1)(r) of the Regulations).
The legislation outlines various consequences for breaches of its provisions. While the explanatory statement does not detail specific offences under the Customs Act 1901 related to TCOs, it is reasonable to infer that any failure to comply with the Act's requirements, such as submitting false information in an application or circumventing the duty rates specified in a TCO, could lead to civil or criminal penalties. These penalties might include fines or imprisonment, depending on the severity of the breach. The exact penalties would be determined according to other relevant sections of the Customs Act 1901 or other applicable legislation, which are not explicitly detailed in the provided text. However, the seriousness of such penalties underscores the importance of adhering to the Act’s stipulations to avoid legal repercussions.