EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716958
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.
Kalhire Pty Ltd applied for a TCO in respect of certain nitrogen generators on 8 October 2007.
Instrument
TCO No 0716958 was made on 30 January 2008. It declares that those certain nitrogen generators 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. 0716958 is taken to have come into force on 8 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 Customs Act 1901 was enacted to regulate the importation and exportation of goods in Australia, providing a framework for the assessment and collection of duties and taxes. One of its provisions allows for Tariff Concession Orders (TCOs), which can reduce the rate of customs duty on certain goods. The Customs Act 1901 was amended to facilitate this by enabling the Chief Executive Officer of Customs to make TCOs for goods that meet specific criteria, such as the absence of substitutable goods produced in Australia. The objective is to encourage the import of goods that are not produced domestically, thereby supporting industry and potentially lowering consumer prices. The instrument in question, Tariff Concession Instrument No. 0716958, was introduced to provide a tariff concession for certain nitrogen generators, reducing their customs duty from the general rate of 5% to free, effective from the date the application was lodged, 8 October 2007.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of tariffs on imported goods, with specific provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders, issued by the Chief Executive Officer of Customs, can lower the rate of customs duty on particular goods, provided the application for the concession meets the core criteria specified in the Act. A key criterion is that no substitutable goods, which are those produced in Australia and capable of being used for the same purpose as the imported goods, are being produced in Australia at the time of the application. Once a TCO is issued, it applies retroactively to the date the application was lodged, benefiting importers by potentially entitling them to a refund of duty paid on goods imported since that date. The Act ensures that the issuance of a TCO does not disadvantage any person or impose new liabilities for actions taken before the order was made. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from interested parties, although no submissions were received for this particular TCO. The instrument, TCO No. 0716958, specifically exempts certain nitrogen generators from the general rate of customs duty of 5%, applying a zero rate instead.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0716958, made under the Customs Act 1901 (the Act), involve the granting of tariff concessions for certain nitrogen generators (section 269F). This instrument was issued on 30 January 2008, following an application by Kalhire Pty Ltd on 8 October 2007. The instrument declares that the specified nitrogen generators are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5% (section 269P(3)). The instrument is effective as of the date the application was lodged, 8 October 2007 (subsection 269S(1)).
The obligations under the Act require the Chief Executive Officer of Customs (the CEO) to assess applications for Tariff Concession Orders (TCOs) to ensure they meet the core criteria set out in the Act. Specifically, section 269C stipulates that an application meets the core criteria if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of key terms, such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', are provided in sections 269D, 269E, and 269F respectively. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)).
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for the failure to comply with the provisions of the Act or the TCO. However, the Act generally provides for enforcement mechanisms that could be applied in the event of non-compliance, including fines and imprisonment for serious breaches related to customs and border protection. The explanatory statement focuses on the procedural aspects and the tariff concessions granted, without detailing specific penalties for non-compliance with this particular TCO.