EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713868
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.
Ri Co Oneweld Pty Ltd applied for a TCO in respect of certain hydrostatic test rig on 31 August 2007.
Instrument
TCO No 0713868 was made on 16 November 2007. It declares that those certain hydrostatic test rigs 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. 0713868 is taken to have come into force on 31 August 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 Parliament of Australia, establishes a framework through which the Chief Executive Officer of Customs may grant Tariff Concession Orders (TCOs) that reduce customs duties on certain goods. The Act, particularly Part XVA, facilitates this mechanism to ensure that Australian businesses have access to competitively priced goods that are not produced domestically, thereby fostering a competitive marketplace and encouraging economic growth. This legislative tool was introduced to address the problem of ensuring that Australian industries do not face undue competitive disadvantage due to the absence of locally produced substitutable goods. The policy objective, as indicated in the explanatory statement, is to facilitate the import of goods that are not domestically produced, thereby enhancing economic efficiency and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0713868 under the Customs Act 1901 applies to specific goods, namely certain hydrostatic test rigs, which were the subject of an application by Ri Co Oneweld Pty Ltd. This instrument pertains to entities involved in the importation of these goods, granting them a concession by exempting them from the general customs duty rate, thus allowing for duty-free importation. The geographic and jurisdictional reach of this Act is national, as it operates under the Commonwealth legislation, impacting importers across Australia. The Act excludes any goods that are specified in section 269SJ of the Customs Act 1901, which lists those goods that cannot be subject to a Tariff Concession Order. The application of this legislation can be extended or restricted through subordinate instruments as outlined in the Customs Tariff Act 1995. The instrument came into force on the date the application was lodged, 31 August 2007, and does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken prior to its registration.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0713868 include section 269C, which sets out the core criteria for tariff concession orders (TCOs), and section 269P, which governs the process of making such orders. Section 269C stipulates that a TCO application will meet the core criteria if, on the day the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business. Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order (a TCO) that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. For the particular hydrostatic test rigs covered by TCO No. 0713868, this means they are subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The obligations and requirements imposed by the Act on parties or entities include the necessity for an applicant to demonstrate that no substitutable goods are being produced in Australia when applying for a TCO. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which lists goods ineligible for TCOs. Upon satisfying themselves that the application meets the core criteria, the CEO must publish a notice in the Gazette inviting submissions from any interested parties. In this case, no submissions were received, allowing the CEO to proceed with making the TCO. The TCO itself provides that it will not affect the rights of any person, except the Commonwealth, in a manner that disadvantages them or imposes liabilities for actions taken before the TCO was registered. This ensures that the rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported since the TCO's effective date.
The Act includes provisions for penalties and consequences related to breaches of its requirements. However, the specific text does not detail any offences or penalties for breaches of the TCO provisions themselves. It is implicit that any breaches of the Customs Act 1901, under which the TCOs are made, would be subject to the penalties outlined in that Act. For general breaches of the Customs Act, penalties can include fines and imprisonment, with the exact penalties depending on the nature and severity of the breach. The Customs Act also provides for civil penalties, such as financial penalties, for non-compliance with its provisions. These penalties are designed to enforce compliance and ensure the proper administration of the tariff concession scheme.