EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702582
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 Pty Ltd applied for a TCO in respect of certain alumina plant precipitation interstage coolers on 15 February 2007.
Instrument
TCO No 0702582 was made on 11 May 2007. It declares that those certain alumina plant precipitation interstage coolers 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. 0702582 is taken to have come into force on 15 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 Tariff Concession Instrument No. 0702582, enacted in 2007, is an instrument made under the Customs Act 1901 to provide tariff concessions for certain goods. This instrument was introduced to address the need for tariff concessions on specific goods that were not being produced in Australia, thereby ensuring that Australian businesses could compete effectively with international counterparts without the burden of high customs duties. The instrument was made by the Chief Executive Officer of Customs following an application by Alcan Gove Development Pty Ltd for tariff concessions on certain alumina plant precipitation interstage coolers. The primary objective was to provide relief to importers by reducing the customs duty on these goods from the general rate of 5% to free, thus enhancing the competitiveness of Australian businesses in the international market.
The instrument was subject to consultation as required by the Customs Act 1901, although no submissions were received in response to the notice published in the Gazette. The tariff concession order came into effect on the date the application was lodged, 15 February 2007. Importantly, the order does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. Importers of the specified goods are eligible to apply for a refund of duty on goods imported since the commencement date of the order, as per the Customs (Tariff) Regulations 1999.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods. This process is applicable to entities or individuals who apply for a TCO in relation to goods not listed in section 269SJ of the Act, which excludes certain goods from tariff concessions. The CEO evaluates applications based on the core criteria outlined in sections 269C, 269B, and 269D of the Act, ensuring that the goods in question are not substitutable by products manufactured in Australia. Once the CEO is satisfied that the application meets these criteria, a written TCO is issued, as seen in the case of Alcan Gove Development Pty Ltd's application for alumina plant precipitation interstage coolers. The CEO is also required to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in this instance. The TCO, effective from the date the application was lodged, benefits importers by allowing them to apply for a refund of duty on the specified goods imported since the effective date, without imposing any new liabilities on non-Commonwealth entities.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0702582, as outlined in the Customs Act 1901, establish a framework through which Tariff Concession Orders (TCOs) can be issued. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding specific goods. Provided that the goods are not those listed in section 269SJ, which cannot be subject to a TCO, the CEO must determine if the application meets the core criteria set out in section 269C. According to section 269C, an application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied with the application, they must issue a written order (TCO) as per subsection 269P(3) that specifies the goods subject to the TCO and the applicable duty rate, which is zero in this case for certain alumina plant precipitation interstage coolers.
The obligations imposed by this Act on parties and entities are primarily on the CEO of Customs. The CEO must ensure that any TCO application is valid and meets the criteria stipulated in the Act. This involves verifying that the goods in question are not specified in section 269SJ and that no substitutable goods were produced in Australia on the date of the application. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to lodge submissions if they believe the TCO should not be granted. In this instance, the CEO did not receive any submissions, allowing the TCO to proceed.
The Act also outlines potential consequences for non-compliance with its provisions. While the explanatory statement does not explicitly detail criminal or civil penalties for breaches, the overarching Customs Act 1901 does provide for various penalties for non-compliance with customs regulations. These can include fines and imprisonment for serious breaches, reflecting the seriousness with which the Act treats non-compliance. The TCO itself does not affect the rights of any person other than the Commonwealth, ensuring that no existing rights are adversely impacted by the concession. Importers, however, benefit from being able to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.