EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825492
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 inlet duct on 07 August 2008.
Instrument
TCO No 0825492 was made on 31 October 2008. It declares that those certain gas turbine inlet duct 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. 0825492 is taken to have come into force on 07 August 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 by the Parliament of Australia to regulate and manage customs and excise duties on imported and exported goods. A significant aspect of the Act is the scheme for Tariff Concession Orders (TCOs) as outlined in Part XVA. This scheme allows for the reduction or exemption of customs duties on certain goods under specific conditions. Instrument No. 0825492, introduced under this Act, was designed to address a particular need expressed by Origin Energy Power, which sought tariff concessions on certain gas turbine inlet ducts. The instrument was enacted to ensure these goods could be imported without incurring the general rate of duty, which was 5%, thus providing a tariff concession that made the import of these goods duty-free. The objective was to facilitate the import of these specific goods without imposing any disadvantages or liabilities on other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0825492 under the Customs Act 1901 applies to the specific goods known as certain gas turbine inlet duct, which are subject to the application by Origin Energy Power made on 07 August 2008. The Act enables the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, including the absence of substitutable goods produced in Australia at the time of the application. The geographic scope of this Act is national, as it operates within the framework of Commonwealth legislation. The TCO does not impose any disadvantages or liabilities on persons other than the Commonwealth and does not affect any rights as at the date of registration. The application of this TCO extends to benefit importers who can apply for a refund of duty on these goods imported since the effective date of the TCO, which is 07 August 2008. This legislation also allows for the possibility of subordinate instruments that may further define or extend the application of tariff concession orders.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269F, 269C, 269B, 269D, 269E, and 269P(3). Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C stipulates that a TCO application meets the core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. The meanings of terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are defined in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that the TCO application meets the core criteria, section 269P(3) mandates that the CEO must issue a written order declaring the goods as subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities it governs are primarily related to the application process for TCOs. The CEO has the responsibility to assess applications to determine if they meet the core criteria. This includes ensuring that the goods in question are not specified as ineligible under section 269SJ and verifying that no substitutable goods were produced in Australia in the ordinary course of business on the application date. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO being issued, as outlined in section 269K(1). Once the CEO is satisfied that the application meets the criteria, they must make the written order specifying the application of a prescribed tariff item to the goods.
The Act also outlines consequences for non-compliance or breaches of the provisions related to TCOs. While the explanatory statement does not detail specific civil or criminal penalties for breaches, it is implied that failure to comply with the Act’s requirements could result in legal consequences. These could include actions for enforcement, penalties, or other legal remedies available under the Customs Act 1901 or other related legislation. The specifics of such penalties would typically be defined in other sections of the Act or relevant subsidiary legislation.