EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804091
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.
Uranium One Australia Pty Ltd applied for a TCO in respect of certain pulsed columns on 17 March 2008.
Instrument
TCO No 0804091 was made on 30 May 2008. It declares that those certain pulsed columns 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. 0804091 is taken to have come into force on 17 March 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 for a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. The Act allows for the application of a lower rate of customs duty on goods that are the subject of a TCO. The Tariff Concession Instrument No. 0804091 was introduced to address the application made by Uranium One Australia Pty Ltd for a TCO on certain pulsed columns, which was lodged on 17 March 2008. The problem this legislation was introduced to address was the need to provide tariff concessions on specified goods where no substitutable goods were produced in Australia. The policy objective was to ensure that the application of tariff concessions did not disadvantage any person and to allow importers to apply for a refund of duty on goods imported since the TCO came into effect. The instrument was made on 30 May 2008 and declared that the pulsed columns were subject to a free rate of duty, differing from the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0804091 under the Customs Act 1901 applies to entities and individuals involved in the importation of specific goods, namely certain pulsed columns, for which a Tariff Concession Order (TCO) has been granted. This instrument facilitates a lower rate of customs duty on these goods, provided they meet the criteria outlined in the Act. The TCO is applicable to the extent that no substitutable goods are produced in Australia in the ordinary course of business, thereby ensuring that the concession does not undermine domestic production. The application and effect of the TCO are governed by the Commonwealth, extending its reach across the entire nation. Notably, the TCO does not disadvantage any person, including importers who may benefit from a refund of duty on goods imported since the commencement date of the TCO. However, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ, and these exclusions are integral to the operational framework of the legislation. The scope of the Act may be further extended or refined through subordinate instruments, which allow for additional specifications and administrative details.
Key Provisions
The Customs Act 1901 (the Act) outlines a scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) under Part XVA. A TCO applies a lower rate of customs duty to goods specified in the order. Under section 269F of the Act, an application for a TCO can be made by a person to the CEO. If the CEO is satisfied that the application is for goods not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C of the Act. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For instance, section 269C of the Act specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In the case of TCO No. 0804091, the CEO did not receive any submissions in response to this invitation.
In terms of consequences, the Act does not impose any liabilities on any person for actions taken or omitted before the date of registration of a TCO. However, the rights of importers will be beneficially affected. Specifically, under paragraph 126(1)(r) of the Regulations, importers of the goods in question 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. This means that the rights of importers will be positively impacted by the TCO. No penalties or other civil or criminal consequences are specified for breaches of the Act in this context. The focus is on ensuring that the process for making TCOs is fair and transparent while providing benefits to importers.