EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706455
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.
IHI Engineering Australia Pty Ltd applied for a TCO in respect of certain power station steam generation boiler parts on 03 May 2007.
Instrument
TCO No 0706455 was made on 23 July 2007. It declares that those certain power station steam generation boiler parts 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. 0706455 is taken to have come into force on 03 May 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 administration of customs duties, including the imposition of tariffs on imported goods. The Act was introduced to address the need for a structured approach to the regulation of imports, ensuring that duties are applied consistently and fairly. Part XVA of the Act introduces the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, allowing for the reduction or exemption of customs duties on certain goods. The policy objective behind this provision is to support Australian industries by reducing the cost of imported goods that have no domestic substitutes, thereby promoting competitiveness and economic growth. The instrument in question, Tariff Concession Instrument No. 0706455, was enacted by the Parliament of Australia to provide a tariff concession on specific power station steam generation boiler parts, reducing the duty from 5% to free, effective from the date of the application on 3 May 2007.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, aimed at granting lower customs duty rates for certain goods. This mechanism is available to any person who can demonstrate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The legislation mandates that the CEO must make a written order if the application meets the core criteria, which include the absence of substitutable goods in Australia and adherence to the defined terms such as "ordinary course of business" and "substitutable goods." The application process requires public notification through the Gazette, inviting submissions from any interested parties, although no submissions were received in this particular case. The Tariff Concession Order No. 0706455, made on 23 July 2007, pertains to certain power station steam generation boiler parts, granting them a duty-free status by applying item 50 of Schedule 4 to the Tariff, effective from 03 May 2007, the date of application. This order does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth, and it allows for duty refunds for importers of these goods since the effective date of the order.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0706455 under the Customs Act 1901 (sections 269C, 269P(3), and 269S) establish the framework for making Tariff Concession Orders (TCOs) and set out the criteria for these orders. Section 269C stipulates that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires that if the Chief Executive Officer of Customs (CEO) is satisfied that an application meets these criteria, they must make a written order declaring that the goods subject to the application are eligible for the tariff concession. Section 269S specifies that a TCO is considered to come into force on the date the application for the TCO was lodged.
The Act imposes several obligations and requirements on the parties involved. For example, applicants must ensure that their applications meet the core criteria, particularly the requirement that no substitutable goods are produced in Australia on the date of application. The CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made and to consider these submissions. Additionally, once a TCO is made, the CEO must ensure that it does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the TCO's registration.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breaches of the TCO provisions within the Act. However, it is implied that any misuse or improper application of a TCO could potentially lead to legal consequences. For example, if an applicant knowingly provides false information to secure a TCO, they could face legal action for fraud or misrepresentation. Similarly, if the CEO fails to adhere to the statutory requirements when processing TCO applications, this could lead to administrative or judicial review.
In summary, the Tariff Concession Instrument No. 0706455 under the Customs Act 1901 provides a structured process for granting tariff concessions on specific goods. It outlines the criteria for applications, the obligations of the CEO, and the effective date of the concession. While the Act does not specify penalties for breaches, it implies that adherence to the statutory requirements is crucial to avoid potential legal repercussions.