EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507313
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.
BOC Gases Australia Ltd applied for a TCO in respect of a certain helium recovery plant on 15 June 2005.
Instrument
TCO No 0507313 was made on 21 October 2005. It declares that the certain helium recovery plant is a unit 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. 0507313 is taken to have come into force on 15 June 2005.
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 was enacted to facilitate the regulation of customs duties and other charges on imported and exported goods. A significant aspect of this Act is Part XVA, which outlines the process for making Tariff Concession Orders (TCOs). These orders allow for the reduction or exemption of customs duty on specific goods, provided certain criteria are met. The Tariff Concession Instrument No. 0507313, enacted in 2005, exemplifies this process. The legislation was introduced to address the need for tariff concessions in cases where no substitutable goods are produced in Australia, thereby ensuring that Australian businesses remain competitive in the global market. The enactment of this instrument was overseen by the Parliament of Australia, with the policy objective of supporting Australian industry by providing tariff relief where appropriate. The Chief Executive Officer of Customs is responsible for determining whether an application for a TCO meets the core criteria, and if so, issuing the order accordingly.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to entities and individuals seeking to import goods that are eligible for tariff concessions, provided the goods are not specified as ineligible under section 269SJ. The Act mandates that for a TCO to be considered, there must be no goods that are substitutable, produced in Australia, and used in the ordinary course of business. Upon meeting these criteria, the CEO is required to issue a TCO, which then applies a specified reduced rate of customs duty to the goods in question. The instrument, TCO No. 0507313, was made effective from 15 June 2005, the date on which the application was lodged, and it exempts certain helium recovery plants from the general duty rate, applying a free rate instead. The Act does not disadvantage any person, other than the Commonwealth, who had rights as of the registration date, and no liabilities are imposed by this TCO.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must determine if the application meets the core criteria outlined in section 269C. This involves ensuring that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must issue a written order (a TCO) under section 269P(3), declaring that the goods are subject to a specified rate of duty.
The obligations imposed by the Act on parties or entities it governs include the requirement for applicants to ensure that their applications for TCOs meet the core criteria, specifically that no substitutable goods were produced in Australia at the time of the application. The CEO of Customs has the responsibility to review applications, determine if they meet the core criteria, and publish notices inviting submissions from interested parties. In this instance, the CEO did not receive any submissions in response to the published notice, which included an invitation for any person who believed there were reasons why the TCO should not be made to lodge a submission.
The Act provides for specific consequences and penalties in case of breach. However, the explanatory statement for TCO No. 0507313 does not detail specific offences, penalties, or civil/criminal consequences for breach. The focus of the statement is on the procedural aspects of the application and issuance of the TCO, and the rights and liabilities of the parties involved. Nevertheless, general provisions of the Customs Act 1901 and associated regulations would apply to any breaches, potentially involving fines or other legal actions for non-compliance with customs regulations.
In summary, the TCO No. 0507313 applies to a certain helium recovery plant, granting it a tariff concession that lowers the duty rate from 5% to free. The application and issuance process followed the statutory requirements under the Customs Act 1901, and no submissions were received opposing the TCO. The TCO became effective from the date the application was lodged, and it does not impose any liabilities on any person.