EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803282
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.
Brenco Thermal Coating Technology Pty Ltd applied for a TCO in respect of certain thermal sprayers on 27 February 2008.
Instrument
TCO No 0803282 was made on 9 May 2008. It declares that those certain thermal sprayers 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. 0803282 is taken to have come into force on 27 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 was enacted to regulate the importation and exportation of goods, among other purposes, and includes provisions for Tariff Concession Orders (TCOs). These orders provide for reduced or free customs duty on certain goods under specific circumstances, facilitating trade and economic efficiency. Enacted by the Parliament of Australia, the Customs Act 1901 aims to streamline customs processes and support economic policies by allowing for tariff concessions where appropriate. The instrument in question, Tariff Concession Instrument No. 0803282, was made to address the specific application by Brenco Thermal Coating Technology Pty Ltd for tariff concessions on certain thermal sprayers, ensuring that these goods benefit from a lower duty rate as no substitutable goods are produced in Australia. This measure supports the broader policy objective of enhancing Australia's trade competitiveness by reducing import costs for essential goods.
Scope and Application
The Tariff Concession Instrument No. 0803282, made under the Customs Act 1901, pertains to the application for a Tariff Concession Order (TCO) in respect of certain thermal sprayers. This legislative instrument applies to Brenco Thermal Coating Technology Pty Ltd, a company that applied for the concession on 27 February 2008. The Act enables the Chief Executive Officer of Customs to issue TCOs that reduce the customs duty on specified goods, provided the application meets the core criteria set out in section 269C of the Act, such as the absence of substitutable goods produced in Australia. The TCO is effective from the date the application was lodged, 27 February 2008, and applies Commonwealth-wide. Notably, the TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities; instead, it provides a benefit to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0803282 (referred to as TCO No. 0803282) include sections 269C, 269P, and 269S of the Customs Act 1901, which outline the process for applying for and granting Tariff Concession Orders (TCOs). Specifically, section 269C requires that for a TCO to be granted, there must be no goods produced in Australia that could substitute for the goods in question. Section 269P(3) mandates that if this condition is met, the Chief Executive Officer (CEO) of Customs must issue a written TCO, specifying the particular item in the Customs Tariff Act 1995 to which the goods will apply. Under section 269S, the TCO is considered to have come into effect on the date the application was lodged, in this case, 27 February 2008.
Entities and individuals subject to the Customs Act 1901 must adhere to the procedures outlined for applying for and receiving a TCO. The CEO of Customs has the responsibility to review applications and determine whether they meet the core criteria set out in section 269C. This involves verifying that no substitutable goods are being produced in Australia. If an application meets these criteria, the CEO must then issue the TCO as required by section 269P(3). Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be granted. This ensures transparency and allows for public consultation.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can result in various consequences. Although the explanatory statement does not explicitly detail the penalties for non-compliance, breaches of the Customs Act 1901 can generally lead to civil or criminal penalties, depending on the severity and intent behind the breach. The maximum penalties can include fines and, in some cases, imprisonment. For instance, under the Customs Act 1901, misleading or false statements can attract significant fines, and intentional breaches can result in more severe criminal sanctions.
The TCO No. 0803282 specifically addresses the application of tariff concessions to certain thermal sprayers, ensuring they qualify for a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO’s decision to grant the TCO was based on the absence of substitutable goods being produced in Australia, thus meeting the core criteria set forth in the Act. This concession benefits importers by potentially allowing them to apply for refunds of duty paid on these goods imported since the TCO’s effective date. Importantly, the TCO does not impose any new liabilities on any person and does not adversely affect the rights of any person as they stood on the date of registration.