EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708310
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.
J. Boag & Son Brewing Ltd applied for a TCO in respect of certain pressurised liquid CO2 storage tanks on 01 June 2007.
Instrument
TCO No 0708310 was made on 17 August 2007. It declares that those certain pressurised liquid CO2 storage 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 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. 0708310 is taken to have come into force on 01 June 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, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. Enacted by the Australian Parliament, this legislation was introduced to address the issue of ensuring that Australian businesses have access to essential goods at reduced customs duty rates when no domestically produced substitutes are available. Specifically, section 269C of the Act outlines the core criteria for TCO applications, requiring that no substitutable goods are produced in Australia on the day the application was lodged. This ensures that tariff concessions are granted only when there is a genuine need for such concessions due to the unavailability of local alternatives. The policy objective is to support Australian industries by ensuring they have access to necessary goods without the burden of high customs duties, thereby fostering economic efficiency and competitiveness.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply a lower rate of customs duty to specified goods, subject to certain criteria. Applications for TCOs can be made by any person, and if the CEO determines that the application meets the core criteria outlined in the Act, a TCO is issued. Notably, the CEO must ascertain that no substitutable goods are produced in Australia in the ordinary course of business, as defined under the Act. The scope of this legislation is national, extending across the Commonwealth of Australia. However, it explicitly excludes certain goods as per section 269SJ of the Act. Additionally, the application process involves public consultation, where interested parties can submit objections to the proposed concession. The TCO does not retroactively affect any existing rights or impose liabilities on individuals other than the Commonwealth. The commencement of a TCO is effective from the date the application is lodged, and the rights of importers are positively impacted, allowing them to seek refunds on duties paid on goods imported since the effective date of the concession.
Key Provisions
The primary sections of this legislation (sections 269C, 269B, 269D, 269E, 269P, and 269SJ of the Customs Act 1901) establish the criteria for Tariff Concession Orders (TCOs) and the conditions under which these concessions may be applied. Specifically, section 269F allows for the application of a TCO for goods, while sections 269C and 269SJ outline the core criteria and exceptions to TCO eligibility. Section 269P(3) mandates that if the CEO determines an application meets the core criteria, a written order must be issued, which in this case, is TCO No. 0708310. This order specifies that certain pressurised liquid CO2 storage tanks will be subject to a reduced customs duty rate of free, as opposed to the general rate of 5% (Schedule 4, item 50 of the Customs Tariff Act 1995).
The Act imposes certain obligations on the Chief Executive Officer of Customs (CEO) and applicants for a TCO. The CEO must ensure that the application is not for goods that fall under section 269SJ, which are ineligible for a TCO. The CEO must also confirm that no substitutable goods are produced in Australia at the time of the application (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO (subsection 269K(1)). The applicant must provide sufficient evidence to satisfy the CEO that the goods are eligible for a concession.
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance, it is important to note that breaches of the Act can lead to legal action. The consequences could range from fines to more severe penalties depending on the nature and severity of the breach. The maximum penalties are not explicitly stated in this particular excerpt, but they would be outlined in other sections of the Customs Act 1901 or related legislation.
The legislative scheme ensures that the rights of importers are protected and potentially beneficially affected by the TCO. Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). Furthermore, the TCO does not impose any new liabilities on any person, safeguarding against any disadvantage to individuals or entities other than the Commonwealth.
Overall, the legislation provides a structured process for the application and granting of tariff concessions, with specific requirements and obligations for both the CEO and applicants. The legal framework aims to facilitate the importation of certain goods under more favourable tariff conditions while ensuring compliance and protecting the interests of all parties involved.