EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701747
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.
TRUenergy Tallawarra Pty Limited applied for a TCO in respect of a certain co-generation power station gas supply line on 02 February 2007.
Instrument
TCO No 0701747 was made on 30 April 2007. It declares that those certain co-generation power station gas supply lines 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. 0701747 is taken to have come into force on 02 February 2007.
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 provide a framework for the regulation of customs duties and other import and export taxes. The Act was introduced to address the need for a comprehensive legislative structure to govern the administration of customs and excise duties. This includes the facilitation of trade, the protection of revenue, and the enforcement of customs-related laws. The Customs Act 1901 is administered by the Parliament of Australia and includes provisions for the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The policy objective is to provide relief from customs duties for certain goods, provided they meet specific criteria, thereby supporting economic efficiency and competitiveness. The explanatory statement outlines the process for applying for and making a TCO, as well as the conditions under which such concessions are granted, ensuring transparency and fairness in the application process.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs. This legislation applies to any person or entity that seeks to have a lower rate of customs duty applied to goods that are the subject of a TCO, provided that the goods are not specified in section 269SJ of the Act. Such goods include those that cannot be subject to a TCO, as delineated in the Act. The scope of this legislation is national, as it operates under the authority of the Commonwealth of Australia. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D and 269E of the Act. If the CEO is satisfied that the application meets these criteria, they must issue a written order, which is effective from the date the application was lodged, as per subsection 269S(1). The application of this Act may be further refined through subordinate instruments, though these are not explicitly mentioned in the provided text.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) that relate to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, and 269F (subsection 269P(3)). These sections outline the process and criteria for the Chief Executive Officer of Customs (the CEO) to make a TCO, which effectively reduces the customs duty on certain goods. Section 269F allows a person to apply to the CEO for a TCO, while section 269C stipulates that the application must meet the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The CEO must then make a written order (TCO) if satisfied that the application meets these criteria (subsection 269P(3)).
The Act imposes certain obligations on the parties involved in the TCO process. The CEO is required to decide whether an application meets the core criteria and, if satisfied, to make a TCO (subsection 269P(3)). The applicant must ensure that the application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this case, TRUenergy Tallawarra Pty Limited applied for a TCO, and the CEO was satisfied that the application met the core criteria, leading to the issuance of TCO No. 0701747 on 30 April 2007.
The Act provides for certain offences, penalties, and consequences for breaches. However, the Explanatory Statement does not specify any particular offences or penalties related to the TCO process itself. It is noted that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration to the extent that it would disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration. Importers of the goods affected by the TCO 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, as per paragraph 126(1)(r) of the Regulations.
In conclusion, the Tariff Concession Instrument No. 0701747 under the Customs Act 1901 allows for a reduction in customs duty on certain goods, provided that the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The CEO must follow certain procedural obligations when deciding on a TCO application and publishing a notice in the Gazette. While the Explanatory Statement does not detail specific penalties for breaches, it does clarify that the TCO does not impose any liabilities on any person and will beneficially affect the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.