EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807600
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.
Viking Energy Pty Ltd applied for a TCO in respect of certain skid mounted cementer on 12 May 2008.
Instrument
TCO No 0807600 was made on 04 August 2008. It declares that those certain skid mounted cementer 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. 0807600 is taken to have come into force on 12 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. 0807600 was enacted in 2008 as part of the Customs Act 1901, addressing the need to provide tariff concessions for specific goods that are not produced domestically, thereby encouraging their import. This legislative instrument was introduced to streamline the process for granting tariff concessions by the Chief Executive Officer of Customs, ensuring that applications are assessed against specific criteria. The policy objective is to facilitate the import of goods that are not manufactured in Australia, thus promoting economic efficiency and consumer choice without imposing any adverse effects on existing rights or liabilities. The Tariff Concession Order, in this case concerning skid-mounted cementers, was made effective from the date the application was lodged, ensuring a seamless transition for importers who may be eligible for duty refunds on previously imported goods.
Scope and Application
The Tariff Concession Instrument No. 0807600 under the Customs Act 1901 applies to the specific goods identified in the instrument, namely certain skid mounted cementers, which have been granted a tariff concession order (TCO). The instrument is made pursuant to the authority vested in the Chief Executive Officer of Customs (CEO) to implement TCOs, which provide for a lower rate of customs duty on specified goods. The application of this particular TCO is limited to the goods for which Viking Energy Pty Ltd applied, and it only applies to those goods that are imported into Australia. The TCO does not extend to any other goods or entities unless explicitly stated in the instrument. The geographic and jurisdictional reach of this Act is national, as it pertains to the importation of goods into Australia and is governed by Commonwealth legislation.
The instrument outlines a process where an entity such as Viking Energy Pty Ltd can apply for a TCO if certain conditions are met, specifically that no substitutable goods are produced in Australia. If the CEO determines that the application meets the core criteria, a TCO is issued, reducing the customs duty rate for the specified goods from the general rate to free. The TCO came into effect on the date the application was lodged, which in this case was 12 May 2008. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, other than potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The instrument does not specify any exclusions, exemptions, or thresholds other than those provided by the Customs Act 1901 and its subsidiary legislation.
Key Provisions
The key provisions of the Customs Act 1901, as outlined in Tariff Concession Instrument No. 0807600, are centred on the creation and application of Tariff Concession Orders (TCOs). Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods, provided that the goods do not fall under the exclusions specified in section 269SJ. The CEO must then assess whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Substitutable goods are defined in section 269D as those produced in Australia that can be used in a manner similar to the goods in question. If the CEO is satisfied that the application meets these criteria, a TCO is issued under section 269P(3), specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on parties and entities are straightforward. An applicant seeking a TCO must ensure their application complies with the core criteria and does not pertain to goods excluded under section 269SJ. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting submissions from interested parties and assess the application against the statutory criteria. The CEO must also make a timely decision on whether to grant the TCO and publish the order in the Gazette. Additionally, under section 269K(1), the CEO must ensure that the rights of third parties are not adversely affected by the issuance of a TCO.
In terms of consequences for non-compliance or breach of the Act, the legislation does not explicitly outline specific offences or penalties within the explanatory statement. However, it does state that the TCO does not affect the rights of a person to the disadvantage of that person or impose any liabilities on any person in respect of actions taken before the TCO was registered. This implies that any breach of the Act would likely be dealt with under the general provisions of the Customs Act 1901, which may include penalties such as fines or imprisonment for serious breaches. The absence of specific penalties in this explanatory statement suggests that the primary focus is on the procedural correctness and the benefits to importers rather than punitive measures.