EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826986
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 generator line accessory compartment on 19 August 2008.
Instrument
TCO No 0826986 was made on 07 November 2008. It declares that those certain generator line accessory compartment 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. 0826986 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0826986 was enacted in 2008 under the Customs Act 1901 to provide a mechanism for granting tariff concessions on certain goods, aiming to address issues related to the importation of goods that are not produced domestically and to encourage efficient market practices. The instrument was introduced to provide relief from customs duties for specific goods where there are no substitutable Australian-produced alternatives. This legislative tool allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that result in lower customs duty rates for the specified goods, thereby facilitating trade and potentially reducing costs for businesses importing these items. The policy objective behind this measure is to ensure that imports are not unfairly burdened by customs duties when there are no domestic products that could substitute for them, thus supporting fair trade practices and economic efficiency.
The instrument was developed in response to an application by Origin Energy Power Pty Ltd for a tariff concession on certain generator line accessory compartments, which was subsequently granted as no substitutable goods were being produced in Australia at the time. The process involved consultation and public notice as required by the Customs Act 1901, although no objections were received. The TCO came into effect from the date of the application, ensuring that the rights of importers were protected and that no liabilities were imposed on any person other than the Commonwealth. This measure is designed to benefit importers by allowing them to apply for a refund of any duties paid on the specified goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs (the CEO). This legislation applies to any person who can apply for a TCO in respect of goods, provided that such goods are not specified in section 269SJ of the Act as those which cannot be subject to a TCO. The Act’s geographic and jurisdictional reach is national, as it is a Commonwealth Act. The scope of the Act extends to goods not produced in Australia in the ordinary course of business, and it provides for a lower rate of customs duty for these goods if a TCO is granted. The application process requires the CEO to consider whether the goods are substitutable and produced in Australia, with exclusions outlined in section 269SJ. The Act also allows for the CEO to make written orders declaring the goods subject to a lower customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. The instrument, TCO No. 0826986, which was issued on 7 November 2008, exemplifies the application of this Act by granting a free rate of duty on certain generator line accessory compartments, effective from 19 August 2008, the date the application was lodged. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, and it specifically benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs), as detailed in section 269F. Section 269C outlines the criteria that a TCO application must meet to be considered valid. This includes the requirement that no substitutable goods are produced in Australia on the day the application is lodged. A TCO is then issued by the Chief Executive Officer (CEO) of Customs if the application meets these core criteria. For instance, in TCO No. 0826986, the CEO determined that certain generator line accessory compartments, which are subject to a general duty rate of 5%, qualify for a concession under item 50 of Schedule 4 to the Customs Tariff Act 1995, making the duty rate free.
The obligations imposed by the Act on the parties involved are primarily procedural. The CEO must assess the application and ensure it complies with the stipulated criteria. Once a TCO is issued, the CEO must also ensure that the application is published in the Gazette, allowing for public submissions if any party believes the TCO should not be made. This process was followed in TCO No. 0826986, where the CEO published the application and received no submissions opposing the TCO.
The Act does not explicitly detail specific offences, penalties, or consequences for breaching the terms of a TCO. However, it is implied that any misuse or improper application of the concession would be subject to the general penalties and enforcement mechanisms available under the Customs Act 1901. Such penalties could include fines, imprisonment, or other legal actions as outlined in the broader legislative framework governing customs and excise law in Australia. Given the nature of customs regulations, non-compliance could also result in civil consequences such as fines or the confiscation of goods.