EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804822
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.
Origin Energy Power Ltd applied for a TCO in respect of certain heat recovery steam generators on 27 March 2008.
Instrument
TCO No 0804822 was made on 17 June 2008. It declares that those certain heat recovery steam generators 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. 0804822 is taken to have come into force on 27 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 was enacted by the Australian Parliament and provides a comprehensive framework for the administration of customs and excise in Australia. It allows for the establishment of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can provide tariff concessions on certain goods. This mechanism was introduced to address the need for flexibility in tariff structures to support economic and trade policies, ensuring that certain goods can enter Australia duty-free if they are not produced domestically and no suitable substitutes are available. The Tariff Concession Instrument No. 0804822, made on 17 June 2008, is an example of such a concession, applying to specific heat recovery steam generators and reducing their duty rate from 5% to free. This legislative instrument ensures that importers of these goods can benefit from tariff relief, aligning with the policy objective of promoting economic efficiency and facilitating trade.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods and result in a lower rate of customs duty. The Act applies to any person or entity seeking to import goods that qualify for a tariff concession, provided that the goods are not specified in section 269SJ of the Act, which lists those ineligible for TCOs. The scope of the legislation is federal, operating under the Commonwealth jurisdiction. The Act includes provisions for subordinate instruments to further define and extend its application. Specifically, the Explanatory Statement details how Tariff Concession Instrument No. 0804822 was issued for certain heat recovery steam generators, reducing their duty from the general rate of 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. This TCO took effect from the date the application was lodged, 27 March 2008, and does not affect existing rights or impose liabilities on individuals or entities other than the Commonwealth. Importers of these goods can apply for duty refunds from the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0804822 under the Customs Act 1901, pertain to the application and approval process for tariff concessions on certain goods (sections 269C, 269F, and 269P(3)). Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) to be approved, which requires that no substitutable goods were produced in Australia on the day the application was lodged. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written order must be made declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is valid and meets the core criteria before approving it. The CEO must also publish a notice in the Gazette inviting any person to lodge a submission if they consider there are reasons why the TCO should not be made (subsection 269K(1)). Origin Energy Power Ltd, in this case, must have ensured their application complied with all requirements and provided sufficient evidence that no substitutable goods were produced in Australia. If the CEO receives submissions opposing the TCO, they must consider these before making a decision.
Any breach of the conditions or obligations set out in the Customs Act 1901 could lead to civil or criminal consequences. For instance, knowingly making a false statement in an application for a TCO could be considered a criminal offence. The penalties for such offences can vary, but under Australian law, they may include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant case law and statutory provisions. The TCO itself does not impose any new liabilities on persons other than the Commonwealth and protects the rights of importers who can apply for a refund of duty on goods imported since the TCO came into force.