EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711825
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.
Caltex Australia Petroleum Pty Limited applied for a TCO in respect of a certain diesel hydrotreating plant on 23 July 2007.
Instrument
TCO No 0711825 was made on 02 October 2007. It declares that those certain diesel hydrotreating plants 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. 0711825 is taken to have come into force on 23 July 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. 0711825, enacted under the Customs Act 1901, addresses the issue of ensuring that specific industrial equipment, such as diesel hydrotreating plants, can be imported without incurring high customs duties, thereby supporting the competitive positioning of Australian industries in the global market. This instrument was introduced to facilitate the importation of these goods by the Chief Executive Officer of Customs, provided certain conditions are met, including the absence of substitutable goods produced in Australia. The Customs Act 1901, enacted by the Commonwealth Parliament, establishes a framework for tariff concessions to encourage investment and efficiency within Australian industries by reducing the cost of importing necessary equipment. The policy objective is to promote the efficient operation of industries by ensuring that critical industrial equipment can be imported at a reduced duty rate, thereby fostering economic growth and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0711825, made under Part XVA of the Customs Act 1901, applies to specific goods, namely diesel hydrotreating plants, that are subject to a Tariff Concession Order (TCO). This Act allows the Chief Executive Officer of Customs to make a TCO if certain criteria are met, such as the absence of substitutable goods produced in Australia. The application for a TCO must meet the core criteria outlined in the Act, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged. The instrument itself applies to any person or entity importing the specified diesel hydrotreating plants, providing them with a tariff concession that reduces the customs duty rate to zero, provided the goods are imported after the date the TCO was taken to have come into force, which is 23 July 2007. The geographic reach of the Act is national, as it is a Commonwealth legislation, applying across Australia. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons for actions taken before the date of registration. The Act may be extended or restricted through subordinate instruments as deemed necessary by the CEO.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0711825, pertain to the process of applying for and making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, they must determine whether it meets the core criteria outlined in section 269C. This involves assessing whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO finds the application meets the core criteria, they must make a written order specifying that the goods in question are subject to a particular item of Schedule 4 to the Customs Tariff Act 1995, thereby granting a tariff concession.
The Act imposes specific obligations on the CEO regarding the processing of TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to submit their reasons to the CEO. Additionally, the CEO must ensure that the TCO does not affect the rights of any person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO's registration. This is outlined in section 269S(1), which also states that a TCO is taken to have come into force on the day the application was lodged.
The Act does not explicitly state any offences, penalties, or consequences for breach within the context of TCOs. However, it implies that any failure by the CEO to adhere to the prescribed processes for TCO applications could potentially lead to legal challenges or administrative consequences. The Act ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, safeguarding individuals from any financial burdens resulting from the tariff concessions granted.