EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703394
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.
The Shell Company of Australia Limited applied for a TCO in respect of certain flue gas filtering machines on 01 March 2007.
Instrument
TCO No 0703394 was made on 25 May 2007. It declares that those certain flue gas filtering machines 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. 0703394 is taken to have come into force on 01 March 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, amended by Tariff Concession Instrument No. 0703394 enacted in 2007, introduces a scheme allowing the Chief Executive Officer of Customs to grant tariff concessions for specific goods. This legislation addresses the gap in providing tariff relief for imported goods where no substitutable domestic production exists. The instrument was enacted by the Australian Parliament to streamline the process of tariff reductions and to ensure that businesses can import necessary goods without incurring prohibitive customs duties. The policy objective behind this legislation is to support economic efficiency by allowing the import of goods that cannot be produced domestically, thereby facilitating trade and competition.
The Shell Company of Australia Limited applied for and received a tariff concession for certain flue gas filtering machines, effective from 1 March 2007. The concession, declared through Instrument TCO No. 0703394 on 25 May 2007, eliminated the 5% duty on these machines, aligning with the legislative intent to support industries reliant on imported technology. The instrument ensures that no existing rights or liabilities of non-Commonwealth entities are adversely affected, while enabling importers to seek duty refunds for goods imported from the commencement date of the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). The Act applies to applications made by persons or entities seeking a reduction in customs duty for specific goods not produced in Australia, provided they meet the core criteria set forth in the Act. The CEO is mandated to assess applications ensuring they do not pertain to goods excluded under section 269SJ and must verify that no substitutable goods are produced domestically as per section 269C. The geographic scope of this Act is national, applying across Australia. The application process involves publishing notices in the Gazette to invite submissions, although no submissions were received in the case of TCO No. 0703394, which concerns certain flue gas filtering machines. The TCO, which came into effect on the day the application was lodged, provides a free duty rate for the specified machines, benefitting importers who can apply for duty refunds for imports since the TCO's effective date. The Act does not retroactively impose disadvantages or liabilities on non-Commonwealth entities.
Key Provisions
The main operative sections of this legislation include section 269C which defines the core criteria that must be satisfied for a Tariff Concession Order (TCO) to be made. Specifically, it requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must then decide whether the application meets the core criteria and, if satisfied, must make a written order (section 269P). Section 269K(1) requires the CEO to 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. Finally, subsection 269S(1) 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.
The obligations imposed on the parties by this Act include the requirement for the CEO to satisfy themselves that the application for a TCO meets the core criteria before making a written order. This involves ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO (section 269K(1)). Additionally, the Act specifies that a 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 (subsection 269S(4)).
The legislation does not explicitly outline specific offences or penalties for breaches of its provisions. However, any failure by the CEO to adhere to the requirements for making a TCO could potentially be challenged in court, leading to judicial review or other legal consequences. Moreover, the Act ensures that 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. It is also stipulated that the TCO does not impose any liabilities on any person.