EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807267
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 Limited applied for a TCO in respect of certain power station turbine unit exhaust stack on 08 May 2008.
Instrument
TCO No 0807267 was made on 01 August 2008. It declares that those certain power station turbine unit exhaust stacks 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. 0807267 is taken to have come into force on 08 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 Tariff Concession Instrument No. 0807267, enacted in 2008, is a measure under the Customs Act 1901 designed to provide tariff concessions for specific goods, addressing the gap in tariff rates for particular imports by facilitating lower customs duties. This instrument was introduced to support industries by making certain imported goods more cost-effective, thereby encouraging trade and investment. The instrument was enacted by the Parliament of Australia with the aim of providing tariff relief to businesses that cannot find suitable domestic alternatives for the goods they import. This policy objective is to enhance economic efficiency by ensuring that Australian businesses have access to competitively priced goods, which can contribute to lower overall costs and potentially increased competitiveness in the market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods that are subject to a lower rate of customs duty, provided that the application for the TCO meets certain criteria. An application for a TCO can be made by any person, and if the CEO is satisfied that the application pertains to goods not specified in section 269SJ of the Act, which includes goods that cannot be subject to a TCO, the application is assessed against the core criteria. For a TCO to be issued, the CEO must determine that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, as outlined in sections 269C and 269D of the Act. The TCO applies nationally, affecting the rights of importers to benefit from a reduced duty rate on specified goods, and it does not disadvantage or impose liabilities on any person other than the Commonwealth in respect of actions taken prior to the registration of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269E, and 269F (paragraphs 1-2). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must decide whether the application meets the core criteria set out in section 269C. Section 269C requires that on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms "goods produced in Australia", "ordinary course of business", and "substitutable goods" are defined in sections 269B, 269D, and 269E respectively.
The obligations and requirements imposed by the Act on the parties it governs include the submission of a valid TCO application by a person (section 269F) and the CEO’s duty to assess the application against the core criteria in section 269C (paragraph 3). The CEO must also publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as required by subsection 269K(1) (paragraph 4). Additionally, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO as at the date of registration, thereby protecting them from any disadvantage or new liabilities imposed by the TCO (paragraph 5).
The Act does not explicitly list offences, penalties, or consequences for breach in relation to the TCO process. However, the CEO’s decision-making process is subject to judicial review if it is found to be unreasonable or based on an error of law (paragraph 6). Moreover, any subsequent misuse or fraudulent claims related to the TCO might attract penalties under other relevant sections of the Customs Act or other applicable legislation, such as the Crimes Act 1914. The maximum penalties for such offences would depend on the specific nature and severity of the breach.