EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721690
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.
Anglo Coal Australia Pty Ltd applied for a TCO in respect of certain active front end reactors on 14 December 2007.
Instrument
TCO No 0721690 was made on 07 March 2008. It declares that those certain active front end reactors 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. 0721690 is taken to have come into force on 14 December 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 Australian Parliament, establishes a framework for the administration of customs duties and provides for the making of Tariff Concession Orders (TCOs) to offer relief from certain customs duties. The Act was enacted to streamline the process of applying for tariff concessions, ensuring that businesses can more easily navigate the complexities of customs duty regulations. The problem or gap this legislation addresses includes the need for a systematic approach to reducing customs duties on specific goods to promote trade and industry competitiveness. The Tariff Concession Instrument No. 0721690, introduced under this Act, aims to provide a tariff concession for certain active front-end reactors, reducing the duty from 5% to free. This concession was introduced following an application by Anglo Coal Australia Pty Ltd, and the policy objective is to facilitate the importation of these goods without the burden of duty, thereby benefiting the importing businesses.
Scope and Application
The Tariff Concession Instrument No. 0721690 under the Customs Act 1901 applies to specific goods—certain active front end reactors in this instance—for which a Tariff Concession Order (TCO) has been granted by the Chief Executive Officer of Customs. This legislation targets entities or individuals involved in the importation of these goods, providing them with a concessionary rate of customs duty. The instrument ensures that the import of these goods benefits from a zero-rate duty as opposed to the general 5% rate, effective from the date the application for the TCO was lodged, which in this case was 14 December 2007. The legislation's jurisdictional reach is national, given that it falls under the purview of the Commonwealth. Notably, the TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth, safeguarding existing rights and ensuring no disadvantage is caused to importers or other stakeholders. Furthermore, the instrument operates within the framework set by the Customs Act 1901 and the Customs Tariff Act 1995, with the latter providing the schedule under which the specific duty rates are defined.
Key Provisions
The primary sections of the Customs Act 1901, particularly section 269F (1), outline the process for applying for a Tariff Concession Order (TCO) and the conditions under which these orders can be made. Under section 269F, an application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO). This section stipulates that the CEO is obliged to consider the application unless the goods in question fall under the category of goods specified in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application is valid and the goods do not fall under section 269SJ, they must then assess whether the application meets the core criteria as outlined in section 269C.
In assessing whether a TCO application meets the core criteria, the CEO must determine whether, on the day the application was lodged, there were no substitutable goods being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Section 269D specifies what constitutes goods produced in Australia, while section 269E defines the ordinary course of business. Furthermore, section 269B provides the definition for "substitutable goods," which are goods produced in Australia that can be used in place of the goods subject to the TCO application. If the CEO is satisfied that the application meets these criteria, they are required to issue a written order, a TCO, declaring that the goods in question are subject to a prescribed tariff concession.
The obligations imposed by the Act extend to both the CEO and applicants. The CEO must ensure that applications are assessed thoroughly against the core criteria and that any TCOs issued are in compliance with the Act. They must also publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO, as per subsection 269K(1). In the case of TCO No. 0721690, no such submissions were received. Additionally, the Act imposes on applicants the responsibility to provide sufficient information to support their application and to ensure that the goods they are applying for do not fall under the ineligible category as specified in section 269SJ.
The Act also delineates the consequences for breaches or non-compliance. Although the explanatory statement does not explicitly mention specific offences, penalties, or civil/criminal consequences, it is implied that failure to comply with the requirements for issuing or applying for a TCO could lead to legal challenges or other enforcement actions under the general provisions of the Customs Act 1901. Furthermore, section 269P(3) mandates that a TCO must be made if the CEO is satisfied with the application's compliance with the core criteria, thereby ensuring that any deviation from these provisions could potentially result in the TCO being void or subject to revocation.