EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814430
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.
Boskalis Australia Pty Ltd applied for a TCO in respect of certain profiling precision dredger on 25 June 2008.
Instrument
TCO No 0814430 was made on 12 September 2008. It declares that those certain profiling precision dredger 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. 0814430 is taken to have come into force on 25 June 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. 0814430 was enacted in 2008 under the Customs Act 1901 to address a gap in tariff concessions for certain goods imported into Australia. The Act, enacted by the Australian Parliament, aims to provide tariff concessions on specific goods under the condition that no substitutable goods are produced in Australia in the ordinary course of business. Boskalis Australia Pty Ltd applied for a tariff concession order (TCO) for a certain profiling precision dredger, which was granted as no substitutable goods were produced in Australia. The concession resulted in a tariff rate of free, down from the general rate of 5%. The Customs Act 1901 mandates the Chief Executive Officer of Customs to make such orders if the application meets the core criteria, and in this instance, the application was accepted after no objections were raised during the consultation period. The TCO was effective from the date of the application, 25 June 2008, and it provided beneficial rights to importers, including the ability to apply for a refund of duties paid on the goods since the commencement date.
Scope and Application
The Tariff Concession Instrument No. 0814430, made under the Customs Act 1901, applies to a specific profiling precision dredger as applied for by Boskalis Australia Pty Ltd. This instrument facilitates the concession of customs duty on the specified goods, provided the application for the Tariff Concession Order (TCO) meets the core criteria outlined in the Act. The primary application of this Act is to allow the Chief Executive Officer of Customs to consider and grant tariff concessions on goods that are not substitutable by products manufactured in Australia, effectively reducing the customs duty rate for the specified goods from the general rate to a free rate. The geographical scope of this Act is national, as it operates under the Commonwealth framework and is subject to the Customs Act 1901, which has a nationwide application.
Exclusions or exemptions under this Act are limited to those goods specified in section 269SJ of the Customs Act 1901, which explicitly states that certain goods are ineligible for a TCO. The Act also mandates consultation processes, requiring the CEO to publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. The commencement of the TCO is effective from the date the application was lodged, and it does not retroactively affect any pre-existing rights or liabilities, except to potentially benefit importers who can apply for a refund of duty. The application of the Act is further governed by subordinate instruments, which may extend or restrict its application.
Key Provisions
The primary sections of this legislation concern Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901 (the Act). Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not involve goods specified in section 269SJ, which cannot be subject to a TCO, the CEO must then determine if the application meets the core criteria outlined in section 269C. This section stipulates that the application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F, respectively.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to consider any submissions received from interested parties after publishing a notice in the Gazette (subsection 269K(1)). In this instance, the CEO did not receive any submissions, as indicated in the explanatory statement. Additionally, section 269P(3) mandates that if the CEO is satisfied that the TCO application meets the core criteria, the CEO must make a written order, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This instrument, TCO No. 0814430, was made on 12 September 2008, declaring that certain profiling precision dredgers are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, as opposed to the general rate of 5%.
Regarding the potential consequences of breach, the Act does not explicitly outline offences or penalties for non-compliance with the TCO provisions. However, the rights of persons under the TCO are protected under section 126(1)(r) of the Regulations, which allows importers to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The explanatory statement also clarifies that the TCO does not affect the rights of a person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities in respect of anything done or omitted before the date of registration. This provision ensures that the TCO does not impose any liabilities on any person, further highlighting the protective measures in place for those governed by the Act.