EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804339
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.
Elmar Far East Pty Ltd applied for a TCO in respect of certain wellhead pressure controllers on 16 April 2008.
Instrument
TCO No 0804339 was made on 4 July 2008. It declares that those certain wellhead pressure controllers 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. 0804339 is taken to have come into force on 16 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 was enacted to establish a regulatory framework for the administration of customs and excise duties in Australia. This Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to provide tariff concessions on certain imported goods, facilitating trade and economic growth by reducing the cost of importing specific goods. The Tariff Concession Instrument No. 0804339, enacted in 2008, is an example of such an order which was made in response to an application from Elmar Far East Pty Ltd for tariff concessions on certain wellhead pressure controllers. This instrument aims to ensure that no substitutable goods are produced in Australia, thereby granting the requested tariff concession and providing benefits to importers by reducing the duty on these goods from the general rate of 5% to free. The policy objective behind these concessions is to support Australian industries by preventing local production of goods that could be imported more cost-effectively.
Scope and Application
The Tariff Concession Instrument No. 0804339 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, namely certain wellhead pressure controllers, which were applied for by Elmar Far East Pty Ltd on 16 April 2008. This instrument operates within the scope of the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on eligible goods. The TCO applies to the goods specified in the application, and in this instance, the CEO determined that these goods qualify for a concession, thereby setting their customs duty rate to free, as opposed to the general rate of 5%. This Act operates on a national level, administered by the Commonwealth.
The application of this Tariff Concession Instrument is contingent upon the goods not being substitutable by products manufactured in Australia. If the CEO ascertains that no such substitutable goods are produced domestically, the application meets the core criteria as stipulated in the Customs Act. Once an application is deemed valid, the CEO is obligated to make a written order, which in this case, was TCO No. 0804339, declared on 4 July 2008. This order came into effect on the date the application was lodged, 16 April 2008, without adversely affecting the rights of any persons other than the Commonwealth or imposing liabilities on any person. The rights of importers, however, are positively impacted as they can apply for refunds of duty paid on these goods since the effective date of the TCO.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0804339 (the Instrument) are sections 269F, 269C, and 269P(3) of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria outlined in section 269C, and there are no substitutable goods produced in Australia on the date the application was lodged, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269P(3) mandates that the CEO must make a TCO if satisfied that the application meets the criteria.
The obligations and requirements imposed by the Act on the parties it governs are primarily directed towards the CEO. Once a TCO application is deemed valid, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions. The CEO must also ensure that the TCO application meets the core criteria before making the order, which involves verifying that no substitutable goods were produced in Australia on the date the application was lodged.
For breaches of the provisions under the Act, the consequences are not explicitly detailed in the Explanatory Statement. However, it is reasonable to infer that any failure by the CEO to comply with the statutory requirements could result in legal challenges or administrative reviews. For the applicant, failure to meet the core criteria for a TCO could result in the application being rejected, leading to continued application of the general duty rate rather than the concessional rate. Penalties or specific legal consequences for breaches are not outlined in the provided text.