EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826387
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 Pty Ltd applied for a TCO in respect of certain gas turbine acoustic enclosure on 14 August 2008.
Instrument
TCO No 0826387 was made on 07 November 2008. It declares that those certain gas turbine acoustic enclosure 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. 0826387 is taken to have come into force on 14 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, enacted by the Parliament of Australia, establishes a framework for administering customs duties and provides for the creation of Tariff Concession Orders (TCOs) to facilitate trade by reducing customs duty on certain imported goods. This legislative instrument responds to the need for a streamlined process to provide tariff relief on specific goods that are not produced domestically, thereby encouraging trade and economic growth. The Tariff Concession Instrument No. 0826387, introduced under this Act, addresses the application by Origin Energy Power Pty Ltd for tariff concessions on gas turbine acoustic enclosures. The instrument was enacted to provide a tariff concession, lowering the duty on these specific goods from the general rate of 5% to free, thereby benefiting importers and enhancing competitive dynamics within the relevant market. The policy objective is to ensure that Australian importers are not disadvantaged by higher customs duties on imported goods for which no suitable domestic alternatives exist.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a scheme through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that reduce the customs duty on certain goods. This Act applies to any person or entity that seeks to import goods and benefits from reduced customs duty rates when the CEO issues a TCO. The scope of the Act extends to industries that rely on the importation of goods and transactions involving the import of these goods. Geographically, the Act operates under the Commonwealth jurisdiction, with its provisions and instruments applying across Australia. Notably, the Act excludes certain goods from the TCO scheme, as specified in section 269SJ of the Act, ensuring that the concessions do not apply to goods that could undermine domestic production or have specific regulatory concerns. The Act may also extend its application through subordinate instruments, which further define the scope and specifics of the concessions available under TCOs.
Key Provisions
The primary operative sections of this legislation, specifically the Tariff Concession Order (TCO) No. 0826387, include the decision by the Chief Executive Officer of Customs (CEO) to grant a tariff concession for certain gas turbine acoustic enclosures (section 269C). According to this section, a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business. The CEO must make a written order declaring that the goods are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). The TCO sets a free rate of duty on the specified gas turbine acoustic enclosures, which contrasts with the general rate of 5% (section 269P(3)).
The obligations and requirements imposed by the Act on the parties and entities it governs include the process of applying for a TCO (section 269F) and ensuring that the application meets the core criteria specified by sections 269B and 269C. The CEO must publish a notice in the Gazette inviting submissions on the application (subsection 269K(1)) and consider any submissions received. If satisfied that the application meets the criteria, the CEO must issue the TCO (section 269P(3)). Additionally, the TCO application process requires that the applicant provides sufficient evidence to demonstrate that no substitutable goods are produced in Australia (section 269D).
In terms of consequences for breach, the Customs Act 1901 does not explicitly state offences, penalties, or consequences for non-compliance with the TCO provisions. However, any failure to adhere to the criteria for issuing a TCO could potentially lead to legal challenges regarding the validity of the TCO. Importers who fail to apply for a refund of duty under the TCO may be liable for the full duty amount, as per the Customs Act and Regulations. The specific penalties for non-compliance or failure to apply for a refund would depend on the general provisions of the Customs Act and any applicable regulations.