EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826906
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 oil mist eliminator on 18 August 2008.
Instrument
TCO No 0826906 was made on 07 November 2008. It declares that those certain gas turbine oil mist eliminator 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. 0826906 is taken to have come into force on 18 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 to regulate the importation of goods into Australia and to provide for the collection of customs duty and other charges. It established a comprehensive framework for the administration of customs and excise, including provisions for the tariff classification of goods and the imposition and collection of customs duty. The Act was introduced to address the need for a structured approach to managing the importation of goods, ensuring that the government could effectively regulate and tax imported goods to protect domestic industries and raise revenue. The policy objective of the Act is to provide for the efficient and effective administration of customs and excise in Australia. The Tariff Concession Instrument No. 0826906, made under the authority of the Customs Act 1901, was introduced to provide tariff concessions for certain gas turbine oil mist eliminators. This instrument was made by the Chief Executive Officer of Customs following an application by Origin Energy Power Pty Ltd. The primary purpose of this instrument is to reduce the customs duty on these specific goods, providing a benefit to importers by reducing their costs and potentially lowering the price of the goods in the Australian market. The instrument was enacted to ensure that there were no substitutable goods produced in Australia, thereby meeting the core criteria for tariff concessions as outlined in the Customs Act 1901.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework through which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) to reduce customs duty rates on specific goods. This legislation applies to individuals or entities that seek to import goods that are eligible for reduced customs duty, provided that these goods are not specified as ineligible under section 269SJ of the Act. The geographic reach of this legislation is national, as it is governed by the Commonwealth. A TCO application meets the core criteria if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. The CEO has the discretion to make a TCO if satisfied that the application meets these criteria, and such orders can be further regulated or defined through subordinate instruments. The application and concession do not affect the rights of persons other than the Commonwealth in any way and do not impose any liabilities on any person.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, concern the process and criteria for the establishment of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269S, and 269P(3)). The Act enables the Chief Executive Officer of Customs (CEO) to make a TCO, which allows for a lower rate of customs duty on certain goods. For a TCO to be issued, the CEO must be satisfied that the application is valid and that the goods in question are not specified in section 269SJ, which excludes certain goods from TCO consideration. The CEO must also be satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C).
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to consider and evaluate TCO applications to ensure they meet the core criteria outlined in the Act. This involves verifying that the goods specified in the application do not have substitutable alternatives produced in Australia and are not listed in section 269SJ of the Act. Once the CEO is satisfied, they must issue a written order declaring the goods to which the TCO applies and the prescribed rate of duty under the Customs Tariff Act 1995. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission.
The legislation does not explicitly detail offences or penalties for breaches. However, failure to comply with the provisions of the Customs Act 1901 or any regulations or orders made under it could potentially lead to civil or criminal consequences, depending on the nature and severity of the breach. For instance, penalties for non-compliance with customs laws can include fines and, in some cases, imprisonment. The specific penalties would depend on the particular breach and the discretion of the court.
In summary, the Customs Act 1901 sets out a structured process for the issuance of TCOs, requiring the CEO to carefully evaluate applications and ensure they meet specific criteria before granting a concession. The TCO mechanism aims to provide relief to importers by reducing customs duty on certain goods, subject to the conditions set out in the Act.