EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802894
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.
Process Group Pty Ltd applied for a TCO in respect of certain gas pressure vessel on 09 April 2008.
Instrument
TCO No 0802894 was made on 27 June 2008. It declares that those certain gas pressure vessel 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. 0802894 is taken to have come into force on 09 April 2008.
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 regulation of customs duties, including the ability to grant tariff concessions on certain goods through Tariff Concession Orders (TCOs). These concessions aim to reduce the duty on specific goods, thereby supporting industries that lack domestic production of substitutable goods. The explanatory statement for Tariff Concession Instrument No. 0802894, issued on 27 June 2008, outlines a case where Process Group Pty Ltd successfully applied for a TCO for certain gas pressure vessels, resulting in a reduction of duty from 5% to free. This concession was granted as the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, aligning with the core criteria stipulated in section 269C of the Act. The instrument came into effect on 9 April 2008, the date the application was lodged, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0802894, enacted under the Customs Act 1901, pertains specifically to certain gas pressure vessels. The instrument applies to the individual or entity that lodged the application for a Tariff Concession Order (TCO), which in this case is Process Group Pty Ltd. The Act allows for the application of a lower rate of customs duty on goods that are subject to a TCO, provided that the application meets the core criteria outlined in the Act, including the condition that no substitutable goods are produced in Australia in the ordinary course of business. The instrument has a national reach, extending to all jurisdictions within Australia. The TCO does not impose any liabilities on any person, and it does not affect the rights of persons other than the Commonwealth as at the date of registration. The CEO of Customs has the authority to extend or restrict the application of the TCO through subordinate instruments, although in this instance, no such extensions or restrictions have been noted. The rights of importers will be beneficially affected, as they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) outlines the process for applying for a Tariff Concession Order (TCO), where a lower rate of customs duty applies to specified goods. When a person applies to the Chief Executive Officer of Customs (the CEO) for a TCO, as per section 269C, the CEO must assess whether the application meets the core criteria. This assessment hinges on whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they are required to issue a written TCO under section 269P(3), specifying that the goods in question are subject to a prescribed rate of duty in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the parties under this Act primarily concern the CEO’s responsibilities in processing TCO applications. The CEO must ensure that applications are not for goods specified in section 269SJ, which are ineligible for TCOs. Once an application is deemed valid, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting submissions from interested parties. If no submissions are received, the CEO proceeds to make the TCO. Additionally, the CEO is required to consider whether substitutable goods were produced in Australia, which directly influences the decision to grant or deny the TCO.
In terms of consequences for non-compliance, the Act does not explicitly detail specific offences or penalties for breach related to TCOs. However, any actions that contravene the Act's provisions could potentially lead to legal challenges or administrative penalties, depending on the context of the breach. For example, if a person knowingly submits a false application or provides misleading information, this could be considered an offence under broader administrative law principles, leading to potential civil or criminal consequences. The exact nature and severity of these penalties would be determined by the courts or relevant authorities in the context of the specific breach.