EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612224
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.
NGR Gladstone Operating Services Pty Ltd applied for a TCO in respect of certain turbine generator parts on 24 July 2006.
Instrument
TCO No 0612224 was made on 13 October 2006. It declares that those certain turbine generator 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 10%. The rate of duty for the goods subject to the TCO is 0%.
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. 0612224 is taken to have come into force on 24 July 2006.
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. 0612224, enacted in 2006, is an instrument under the Customs Act 1901 designed to address the problem of providing tariff concessions for specific goods that are not produced domestically. The instrument was created to offer relief by lowering the customs duty on certain imported goods, in this case, turbine generator parts, to zero percent, provided that no similar goods were produced in Australia at the time of application. The Customs Act 1901, enacted by the Australian Parliament, aims to facilitate trade by allowing tariff concessions under certain conditions to ensure that domestic production is not unduly hindered. The Tariff Concession Order was introduced to allow the Chief Executive Officer of Customs to consider applications for such concessions, ensuring that the application meets the core criteria and does not pertain to goods specified as ineligible under section 269SJ of the Act. The policy objective is to provide economic benefits by reducing the cost of imported goods, thereby potentially stimulating trade and economic activity.
Scope and Application
The Customs Act 1901, as modified by the Tariff Concession Instrument No. 0612224, applies to any entity or individual seeking tariff concessions for imported goods that meet specific criteria. Specifically, this Act enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on certain goods, provided no substitutable goods are produced in Australia and the goods do not fall under the exclusions listed in section 269SJ. The application process requires the applicant to demonstrate that the goods are not produced domestically and that they are not prohibited under the Act. Once granted, a TCO provides tariff relief for the specified goods, effective from the date the application was lodged, thereby benefiting importers by potentially allowing them to claim refunds on duties paid prior to the TCO’s effective date. The Act does not disadvantage any person, including importers, in respect of actions taken before the TCO's registration. The geographic reach of this legislation is national, applying across Australia, and it does not impose any liabilities on persons other than the Commonwealth. The Act may be further extended or restricted through subordinate instruments, which can specify additional criteria or conditions for TCOs.
Key Provisions
The main operative sections of this legislation pertain to the granting of tariff concession orders (TCOs) under the Customs Act 1901. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria (section 269C), a written order declaring that the goods are subject to a prescribed rate of duty can be issued (section 269P(3)). In this specific case, TCO No. 0612224, made on 13 October 2006, applies to certain turbine generator parts and declares that these goods are subject to a 0% duty rate, reducing the general rate of 10% (section 269P(3)).
The obligations imposed by the Act on parties and entities it governs include the CEO’s requirement to assess whether a TCO application meets the core criteria, specifically, whether no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The CEO must also publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received (subsection 269K(1)), allowing the TCO to proceed. Furthermore, the Act mandates that a TCO comes into force on the day the application is lodged (subsection 269S(1)), thus TCO No. 0612224 is taken to have come into force on 24 July 2006.
There are no explicit offences or penalties detailed in the explanatory statement for breach of the TCO provisions. However, the Act ensures that the rights of a person (other than the Commonwealth) are not disadvantaged by the TCO, and no liabilities are imposed on any person in respect of anything done or omitted to be done before the date of registration of the TCO (subsection 269S(1)). The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). The legislation therefore provides a structured process for tariff concessions while protecting the rights of stakeholders.