EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716568
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.
Acciona Energy applied for a TCO in respect of certain wind powered electric generating and distribution set on 02 October 2007.
Instrument
TCO No 0716568 was made on 14 December 2007. It declares that those certain wind powered electric generating and distribution set 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. 0716568
is taken to have come into force on 02 October 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. 0716568, enacted under the Customs Act 1901, was introduced to address the gap in tariff concessions for specific goods, thereby promoting economic benefits and facilitating trade. This instrument was created to provide a lower rate of customs duty on certain wind-powered electric generating and distribution sets, which were not being produced in Australia at the time of application. The instrument was issued by the Chief Executive Officer of Customs (CEO) in response to an application by Acciona Energy, ensuring that no substitutable goods were being produced domestically, thus meeting the core criteria set out in section 269C of the Act. The policy objective, as implied, is to support the importation of innovative and environmentally beneficial technologies by reducing associated customs duties.
The instrument was officially published in the Gazette, inviting submissions from the public, though none were received. This TCO, effective from the date of application on 2 October 2007, aims to provide tariff relief without imposing any new liabilities or disadvantaging existing rights of non-Commonwealth entities. Importers of these goods will be eligible for duty refunds on imports made post the effective date, enhancing the economic feasibility of importing such environmentally friendly technologies.
Scope and Application
The Customs Act 1901, specifically through Part XVA, enables the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) that apply lower rates of customs duty to certain goods. A TCO can be applied for by any person, provided that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The CEO must ensure that no substitutable goods, defined as those produced in Australia and capable of being used in the same way as the goods in question, are produced in Australia in the ordinary course of business. If satisfied, the CEO can make a written TCO applying a reduced duty rate as specified in the Customs Tariff Act 1995. For example, TCO No. 0716568, made on 14 December 2007, applies a free rate of duty to certain wind-powered electric generating and distribution sets, effective from 2 October 2007, the date the application was lodged. The CEO must also publish a notice in the Gazette inviting objections, although in this case, none were received. This TCO does not affect the rights of any person as at the date of registration nor impose any liabilities, while allowing importers to apply for a refund of duty paid on these goods since the date the TCO came into force.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269P(3), 269K(1) and 269S(1) of the Customs Act 1901. Section 269F allows for the application for a Tariff Concession Order (TCO), while section 269C specifies that a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms like 'goods produced in Australia', 'ordinary course of business' and 'substitutable goods' are provided in sections 269B, 269D and 269E, respectively. Section 269P(3) mandates that the Chief Executive Officer (CEO) of Customs must make a written TCO if the application meets the core criteria, and section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions against the TCO. Section 269S(1) specifies that the TCO is to be taken as having come into force on the day the TCO application was lodged.
The Customs Act 1901 imposes several obligations and requirements on the parties it governs. Firstly, the CEO must determine if a TCO application meets the core criteria by assessing whether substitutable goods are being produced in Australia. If the application is valid and meets the criteria, the CEO must make a TCO and declare that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions against the TCO. Importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the TCO came into force.
The Customs Act 1901 imposes no civil or criminal consequences for breach of the TCO provisions. However, it is worth noting that 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, and 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. The Explanatory Statement does not provide information on the maximum penalties for breaches of the TCO provisions.