EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806299
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.
Tarong Energy Corporation Limited applied for a TCO in respect of certain low nitrogen oxide burners on 02 May 2008.
Instrument
TCO No 0806299 was made on 25 July 2008. It declares that those certain low nitrogen oxide burners 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. 0806299 is taken to have come into force on 02 May 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 Parliament of Australia, establishes a framework for the administration of customs and excise in Australia. The Act includes provisions for the creation of Tariff Concession Orders (TCOs), which provide for a lower rate of customs duty on certain goods. The Tariff Concession Instrument No. 0806299, made on 25 July 2008, addresses a specific application by Tarong Energy Corporation Limited for a TCO concerning certain low nitrogen oxide burners. The policy objective of this Instrument is to provide tariff concessions for goods that are not produced in Australia in the ordinary course of business, thereby promoting the importation of such goods. By declaring that these burners are subject to a free rate of duty, the Instrument facilitates the importation of these goods without incurring the general 5% duty rate, ultimately benefiting importers who can apply for duty refunds on goods imported since the TCO came into force on 2 May 2008.
Scope and Application
The Tariff Concession Instrument No. 0806299 applies to specific low nitrogen oxide burners as declared by the Chief Executive Officer of Customs under the Customs Act 1901. This legislation allows for the application of tariff concessions to goods that are not substitutable by Australian-produced goods, thereby providing a reduced or free customs duty rate. The Act applies to any person or entity that imports the specified goods, and its scope extends nationally within Australia, governed by the Commonwealth. The Instrument was made in response to an application by Tarong Energy Corporation Limited, and the decision to grant the concession was based on the CEO's satisfaction that no substitutable goods were produced in Australia. The application process involves a public notice in the Gazette, inviting submissions from interested parties, although in this case, no submissions were received. The instrument comes into effect from the date the application was lodged, which is 02 May 2008, and it does not impose any liabilities or disadvantage any person except the Commonwealth. The rights of importers are positively affected as they can apply for a refund of duty on goods imported since the commencement date of the concession.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0806299 under the Customs Act 1901 (section 269C, 269P, and 269SJ) establish a framework for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) for certain goods, which can reduce the rate of customs duty applied to them. Specifically, section 269C requires that for a TCO application to meet the core criteria, it must be the case that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. 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 obligations imposed by this Act on the parties involved primarily concern the application and review processes for TCOs. For applicants such as Tarong Energy Corporation Limited, the obligation is to ensure that their application details meet the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, must review applications to ensure compliance with these criteria and make a decision within the stipulated timeframe. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the TCO. The CEO must also consider any submissions received and decide whether to proceed with the TCO.
The Act does not explicitly outline specific offences or penalties for breaches related to TCOs. However, the general legal framework under which the Customs Act operates implies that any non-compliance with the requirements for applying for or administering TCOs could potentially lead to legal consequences. These might include administrative penalties for incorrect or misleading information provided in an application, or legal actions for any actions that contravene the Act’s provisions. Although the explanatory statement does not detail specific penalties, it is understood that breaches could result in civil or criminal consequences depending on the severity and intent behind the breach.