EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615151
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.
Alcan Gove Development applied for a TCO in respect of certain high pressure superheated steam boilers on 29 September 2006.
Instrument
TCO No 0615151 was made on 15 December 2006. It declares that those certain high pressure superheated steam boilers 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. 0615151 is taken to have come into force on 29 September 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 Customs Act 1901 was enacted to facilitate international trade and ensure appropriate revenue collection through customs duties. To address the need for tariff concessions in specific cases, Part XVA of the Act was introduced, enabling the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for goods, thereby applying a lower rate of customs duty. This legislative framework allows for the reduction or exemption of duty on certain goods, provided no substitutable goods are produced in Australia and the application meets the core criteria outlined in section 269C of the Act. The policy objective of these concessions is to support Australian businesses by making imported goods more competitively priced, thereby aiding in economic growth and international competitiveness. Enacted by the Parliament of Australia, this provision ensures that the Customs Act remains adaptable to the evolving needs of trade and industry.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply reduced rates of customs duty to certain goods. This legislation enables Australian entities, such as businesses and importers, to apply for tariff concessions if they can demonstrate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The scope of this Act is national, applying across the Commonwealth of Australia, and it extends to any entity or person involved in the importation of the specified goods. The Act explicitly excludes goods listed in section 269SJ from being subject to a TCO. The instrument, TCO No. 0615151, made on 15 December 2006, is an example of how the Act operates, granting a tariff concession on high-pressure superheated steam boilers, with the CEO determining that no substitutable goods were produced domestically. The instrument came into force on the date of the application, 29 September 2006, and does not affect pre-existing rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer (CEO) of Customs can lower the rate of customs duty on certain goods (s 269F). If an application is made under section 269F and it pertains to goods not specified in section 269SJ, the CEO must assess whether the application meets the core criteria set out in section 269C. A TCO application meets these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Act on the parties involved are primarily centred around the application process for a TCO. The CEO must review applications to determine if they meet the core criteria, and if so, issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made (s 269K(1)). In the case of TCO No 0615151, which was made on 15 December 2006 for certain high pressure superheated steam boilers, the CEO was satisfied that no substitutable goods were produced in Australia, and thus a TCO was issued. This TCO declared that the specified boilers were subject to a free rate of duty, as opposed to the general rate of 5%.
Under the Customs Act 1901, breaches of the provisions related to TCOs may result in civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, it is known that the Act allows for various penalties for breaches, which can include fines and imprisonment depending on the severity and intent of the breach. The exact penalties would be determined by the courts based on the specific circumstances of each case. The Act also ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO, and that no new liabilities are imposed on any person as a result of the TCO.