EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714096
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.
Plantation Energy Ltd applied for a TCO in respect of certain pellet manufacturing line on 4 September 2007.
Instrument
TCO No 0714096 was made on 9 November 2007. It declares that those certain pellet manufacturing line 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 0%.
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. 0714096 is taken to have come into force on 4 September 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, provides a framework for the administration of customs duties, including the ability to issue Tariff Concession Orders (TCOs). These orders, administered by the Chief Executive Officer of Customs, apply lower rates of customs duty to specified goods, provided that certain criteria are met. The legislation aims to support Australian industries by reducing the cost of imported goods, thereby encouraging the use of locally produced substitutes and fostering economic growth. In this context, Tariff Concession Instrument No. 0714096 was introduced to provide a tariff concession for certain pellet manufacturing lines, as requested by Plantation Energy Ltd. The instrument was enacted to address the need for reduced customs duties on these specific goods, which were not being produced in Australia at the time of the application, thus aligning with the policy objective of promoting domestic industry and reducing the financial burden on importers.
Scope and Application
The Customs Act 1901, through Part XVA, governs the process by which Tariff Concession Orders (TCOs) are made, allowing the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. This applies to any person or entity that seeks to import goods eligible for a tariff concession. The Act’s jurisdictional reach is national, as it is a Commonwealth Act. The process for obtaining a TCO involves submitting an application to the CEO, who then determines if the application meets the core criteria outlined in section 269C of the Act. Specifically, the application must concern goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once the CEO is satisfied that the application meets these criteria and no submissions opposing the concession are received, a written TCO is issued. The rights of importers are positively affected, as they can apply for a refund of duties paid on goods imported after the TCO comes into force, which is the day the application is lodged. Notably, the TCO does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration in a manner that disadvantages them or imposes liabilities for actions taken prior to the registration of the TCO.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ (sections 269C, 269F, 269P, and 269SJ). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which lists goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. This section mandates that a TCO application meets the core criteria if, on the application's lodgement date, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must issue a written order (a TCO) as per section 269P(3), specifying that the goods in question are subject to a prescribed tariff concession.
The obligations imposed by the Act on parties or entities governed by it include the requirement for applicants to ensure that their applications meet the core criteria as defined by sections 269C and 269SJ. The CEO is obligated to assess the validity of the application against these criteria and to make a decision based on this assessment. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be granted. This ensures transparency and provides an opportunity for interested parties to voice their concerns.
Under the Act, breaches or non-compliance with the requirements for TCOs can lead to civil or criminal consequences. However, the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach. It is important for applicants and the CEO to adhere to the statutory requirements to avoid potential legal ramifications, though the exact nature of these consequences is not elaborated upon in the explanatory statement.