EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803239
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.
Boc Ltd applied for a TCO in respect of certain plasma arc torch assemblies on 26 February 2008.
Instrument
TCO No 0803239 was made on 9 May 2008. It declares that those certain plasma arc torch assemblies 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. 0803239 is taken to have come into force on 26 February 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 Australian Parliament, provides a framework for the regulation of customs and excise duties, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which lower the duty on certain goods. This legislative instrument, specifically Tariff Concession Instrument No. 0803239, was introduced to address the problem of ensuring that Australian industries can access necessary goods without being burdened by prohibitive customs duties, particularly in cases where no suitable domestic alternatives exist. The policy objective of this instrument is to support Australian industries by facilitating access to competitively priced goods, thereby promoting economic efficiency and competitiveness. This was realised through the application and approval of a TCO for certain plasma arc torch assemblies, which now benefit from a reduced rate of customs duty, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0803239 under the Customs Act 1901 applies to entities or individuals who are seeking tariff concessions on specific goods, namely certain plasma arc torch assemblies in this case. The Act allows for the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) that reduces the customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The application of the Act is primarily concerned with the import of goods and the associated customs duties, and it operates within the national jurisdiction of Australia. The TCO does not affect any existing rights or liabilities of parties except for the Commonwealth and does not impose new liabilities on any person. Furthermore, the Act provides for the CEO to publish notices in the Gazette to invite submissions from interested parties, although no such submissions were received for this particular TCO. The TCO is effective from the date the application was lodged, and it allows for the import of the specified goods at a zero duty rate, which is a departure from the general duty rate of 5% for these goods.
Key Provisions
The Tariff Concession Instrument No. 0803239, made under the Customs Act 1901 (the Act), provides a tariff concession order (TCO) for certain plasma arc torch assemblies. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. This instrument declares that these certain plasma arc torch assemblies are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as the CEO was satisfied that no substitutable goods were produced in Australia (section 269P(3)).
The main obligation imposed by this Act on the parties involved is that the CEO must ensure that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This means that the CEO must verify the production status of any goods similar to those being applied for in Australia. If the CEO determines that the application meets the criteria, they must make a written order (the TCO) specifying that the goods in question are subject to a lower rate of customs duty, as outlined in the Tariff (subsection 269P(3)).
The CEO also has a procedural obligation to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, no submissions were received. Failure to comply with these obligations could result in the TCO not being properly granted, which would mean that the intended tariff concessions would not apply to the specified goods.
There are no explicit criminal or civil penalties mentioned for breaches of the TCO provisions within this explanatory statement. However, the consequences of non-compliance could include the loss of tariff concessions, which could adversely affect the financial interests of the applicant or any subsequent importers of the goods in question. The Act itself does not specify maximum penalties, but general principles of administrative law might apply where breaches of statutory obligations occur.