EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703432
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.
BOC Gases Australia Ltd applied for a TCO in respect of certain cryogenic tanks on 2 March 2007.
Instrument
TCO No 0703432 was made on 25 May 2007. It declares that those certain cryogenic tanks 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 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. 0703432 is taken to have come into force on 2 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, enacted by the Australian Parliament, provides for a scheme under which Tariff Concession Orders (TCOs) may be made to apply a lower rate of customs duty on specific goods. This legislation was introduced to address the need for a streamlined process to reduce customs duty on goods for which there are no Australian-made substitutes. The Customs Act 1901 allows for the Chief Executive Officer of Customs to make such orders if certain criteria are met, specifically if no substitutable goods are produced in Australia. TCO No. 0703432, made on 25 May 2007, is an example of this process, where the CEO granted a concession on certain cryogenic tanks, reducing the duty from 5% to 0%. This legislative mechanism ensures that Australian consumers and businesses can benefit from reduced costs on imported goods, provided that there is no local production of equivalent items.
Scope and Application
The Tariff Concession Instrument No. 0703432 applies to the specific cryogenic tanks for which BOC Gases Australia Ltd has applied for a Tariff Concession Order (TCO) under the Customs Act 1901. The application was lodged on 2 March 2007 and the TCO was issued on 25 May 2007. The TCO affects the importation of these goods by reducing the duty from the general rate of 5% to 0%. The Act applies to any person or entity that imports the specified goods into Australia and provides them with a benefit by reducing the customs duty payable on these goods. The TCO applies nationally across Australia, given its foundation under the Commonwealth Customs Act 1901. However, it is specifically tailored to the circumstances of BOC Gases Australia Ltd's application for these cryogenic tanks. There are no stated exclusions or exemptions within the text of this particular TCO, though broader exclusions may exist within the Customs Act 1901 itself, particularly those outlined in section 269SJ. The application of the Act may be extended or further defined through subordinate instruments, such as regulations or further TCOs, but no such extensions or restrictions are noted in this specific TCO.
Key Provisions
The Tariff Concession Instrument No. 0703432, under the Customs Act 1901, establishes a tariff concession order (TCO) for certain cryogenic tanks, lowering the duty rate from 5% to 0% (sections 269F, 269P(3)). This was initiated by BOC Gases Australia Ltd, who applied for the concession on 2 March 2007, and subsequently, the CEO issued the written order on 25 May 2007. The TCO is effective from the date of application, 2 March 2007, as per section 269S(1). This order ensures that the rights of importers are protected and they can apply for duty refunds for goods imported since the effective date (Regulation 126(1)(r)).
The Act imposes certain obligations on the Chief Executive Officer of Customs (CEO) and the applicants. When a TCO application is received, the CEO must verify that it does not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs. If the CEO determines that the application meets the core criteria under section 269C, they must make a written order declaring that the goods in question are subject to the prescribed tariff item (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the TCO (subsection 269K(1)). In this case, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 could result in various consequences. Although specific penalties are not detailed in the explanatory statement, breaches of the Act generally may lead to civil or criminal penalties depending on the nature and severity of the offence. For instance, misrepresenting information in an application or attempting to circumvent the provisions of the Act could result in criminal charges. Civil penalties may also apply for non-compliance with the regulations, which could include fines or other financial penalties as determined by the courts.
In summary, the Tariff Concession Instrument No. 0703432 facilitates the reduction of customs duty on certain cryogenic tanks by establishing a TCO under the Customs Act 1901. It outlines the process for application and approval, ensures the rights of importers are safeguarded, and mandates certain procedural obligations on the CEO. While the explanatory statement does not specify exact penalties for non-compliance, breaches of the Act generally can lead to criminal or civil consequences.