EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712169
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.
Coogee Chemicals Pty Ltd applied for a TCO in respect of certain electrolyser membranes on 27 July 2007.
Instrument
TCO No 0712169 was made on 08 October 2007. It declares that those certain electrolyser membranes 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. 0712169
is taken to have come into force on 27 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides for a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs). The purpose of this legislation is to offer relief from customs duties for certain goods, specifically those for which no substitutable goods are produced in Australia. The Act aims to ensure that Australian businesses and consumers benefit from lower tariffs on specific imported goods, which can stimulate economic activity and competition within the domestic market. This legislative approach addresses the gap by facilitating tariff reductions for goods where there is no domestic production of substitutable alternatives, thereby promoting efficiency and consumer welfare. The TCO process allows for applications from interested parties, subject to certain criteria and without adverse effects on existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods for which an application is made, and they dictate a lower rate of customs duty, as per the provisions of Schedule 4 to the Customs Tariff Act 1995. The application process requires that the goods in question are not specified in section 269SJ of the Customs Act, which excludes certain goods from TCO eligibility. The CEO evaluates whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E, and 269F of the Act. If the application is deemed to meet these criteria, the CEO must issue a written TCO. This legislative framework ensures that the TCO applies to the particular goods from the date the application is lodged, without retroactively affecting the rights or imposing liabilities on any person other than the Commonwealth.
Key Provisions
The main operative sections of this legislation (F2007L04123) pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for the application of a TCO for goods, provided they are not listed in section 269SJ, which details goods that cannot be subject to a TCO. The Chief Executive Officer of Customs (CEO) must assess whether the application meets the core criteria, which is detailed in sections 269C, 269B, and 269E. If the CEO is satisfied that the application meets these criteria, a TCO is issued under section 269P(3). This particular TCO, number 0712169, applies to certain electrolyser membranes, which now have a duty-free rate as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties it governs include the requirement for applicants to ensure their goods meet the criteria for a TCO and for the CEO to thoroughly assess each application against these criteria. The CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not proceed. This is stipulated in subsection 269K(1) of the Act. The CEO must then consider any submissions received before making a decision on the TCO application. In this case, no submissions were received, which facilitated the swift progression to the issuance of TCO No. 0712169.
Regarding the consequences of breach, the Act does not explicitly outline offences or penalties related to the TCO process. However, any improper application or fraudulent claims for tariff concessions could potentially lead to legal action under broader provisions of the Customs Act 1901. For instance, misrepresentation or providing false information in an application could attract penalties under sections pertaining to fraudulent customs activities. Such actions could result in both civil and criminal penalties, including fines and imprisonment, depending on the severity of the breach.
TCO No. 0712169 ensures that the rights of importers are not adversely affected, as outlined in subsection 269S(1) of the Act. Importers of the specified goods can apply for a refund of duty paid on goods imported from the date the TCO was deemed to come into force, which is 27 July 2007 in this instance. This safeguard ensures that the TCO does not impose any new liabilities on any person. Instead, it provides a benefit to importers by reducing their customs duty burden for the specified goods.