EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0820284
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 applied for a TCO in respect of certain gas turbine fuel delivery systems on 18 July 2008.
Instrument
TCO No 0820284 was made on 10 October 2008. It declares that those certain gas turbine fuel delivery systems 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. 0820284 is taken to have come into force on 18 July 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 to regulate the importation of goods into Australia, and the associated collection of customs duty and other charges. It provides a framework for the administration of customs and excise, and aims to protect Australian industry and consumers while facilitating international trade. In 2008, the Parliament introduced Tariff Concession Instrument No. 0820284 to address a specific gap in the Customs Act. This instrument, made under section 269C of the Act, provides for a tariff concession for certain gas turbine fuel delivery systems applied for by Origin Energy Power on 18 July 2008. The purpose of this concession is to reduce the rate of customs duty on these goods to zero, provided that no substitutable goods are produced in Australia. This policy objective aims to support the efficient operation of the relevant industry by ensuring that necessary goods are available at a reduced cost, while maintaining the integrity of the customs duty system.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0820284, applies to the application and approval process of Tariff Concession Orders (TCOs) for specific goods, which in this instance are certain gas turbine fuel delivery systems. The Act operates under the jurisdiction of the Commonwealth and applies to any person who may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods not specified in section 269SJ of the Act. The Act requires the CEO to assess the application against the core criteria, specifically ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The application for a TCO by Origin Energy Power, which was accepted and processed on 18 July 2008, demonstrates the application of these provisions, with the TCO coming into force on the same date. The instrument does not extend to imposing any liabilities or disadvantaging any person other than the Commonwealth, and it provides for the potential refund of duty to importers under specific regulations.
Key Provisions
The main sections of this legislation concern the making and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO is required to determine if the application meets the core criteria specified in sections 269C and 269P(3) of the Act, which involve assessing whether no substitutable goods are produced in Australia on the day the application was lodged. If the application meets these criteria, the CEO must make a written order, as specified in section 269P(3), that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This particular TCO, number 0820284, applies to certain gas turbine fuel delivery systems, reducing the duty from 5% to free.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs, who must assess the validity of TCO applications against the core criteria outlined in the Act. The CEO is also mandated to publish a notice in the Gazette inviting any objections to the proposed TCO, as per section 269K(1). If no objections are received, the CEO is required to proceed with the order. The rights of third parties are protected such that the TCO does not disadvantage anyone or impose new liabilities for actions taken before the TCO's effective date.
In terms of potential offences and penalties, the Act does not explicitly outline specific criminal or civil penalties for breaches related to TCOs. However, any misuse or fraudulent applications could potentially lead to legal repercussions under other sections of the Customs Act 1901 or related legislation, including fines or imprisonment if fraud or wilful misrepresentation is involved. The primary focus of the Act is on the procedural correctness and fairness in the application and implementation of TCOs.
The consequences of non-compliance with the Act's provisions can include the nullification of the TCO if it is found to have been improperly granted. Importers or applicants who do not adhere to the stipulated criteria or who submit false information could face legal action, which might include revocation of any tariff concessions and potential financial penalties. The Act ensures that the rights and interests of all parties are safeguarded, particularly ensuring that the TCO does not impose new liabilities or disadvantage any person.