EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829721
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.
Downer Edi Works Pty Ltd applied for a TCO in respect of certain asphalt plant on 05 September 2008.
Instrument
TCO No 0829721 was made on 12 December 2008. It declares that those certain asphalt plant 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. 0829721 is taken to have come into force on 05 September 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. 0829721 was enacted in 2008 under the Customs Act 1901. This legislation was introduced to address the need for tariff concessions on specific goods, allowing for reduced customs duties where certain conditions are met. The Customs Act 1901, overseen by the Australian Parliament, provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower customs duties on goods not produced in Australia. The policy objective of this instrument is to facilitate trade by reducing the cost of importing specified goods, thereby potentially increasing their availability and affordability in the domestic market. This instrument specifically addresses an application by Downer Edi Works Pty Ltd for tariff concessions on certain asphalt plant, effective from the date of application, 5 September 2008.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower customs duties on certain goods. This scheme is designed for individuals and entities that wish to import goods for which no substitutable alternatives are produced in Australia. Section 269F of the Act allows for applications to be made by any person to the CEO for a TCO, provided that the goods are not listed in section 269SJ of the Act, which excludes certain goods from eligibility. The CEO assesses applications against core criteria outlined in section 269C, focusing on the absence of substitutable goods produced in Australia as per section 269D and ordinary course of business as per section 269E. Upon satisfying these criteria, the CEO issues a written order under section 269P(3) specifying the goods and the applicable duty rate from the Customs Tariff Act 1995. This legislation applies nationally across Australia and does not disadvantage existing rights or impose liabilities on persons for actions taken prior to the TCO's effective date. Additionally, importers of the affected goods can apply for duty refunds under the Customs (Prohibited Imports) Regulations 1956. The CEO is also required to publish notices in the Gazette inviting submissions from interested parties, though in this case, no submissions were received.
Key Provisions
The main operative sections of this Tariff Concession Instrument are sections 269C, 269P, and 269S, which detail the criteria for making a Tariff Concession Order (TCO) and the conditions under which such orders can be made (269C). Specifically, section 269C stipulates that the CEO must consider whether the goods in question are substitutable by Australian-produced goods. If the CEO is satisfied that no substitutable goods are produced in Australia, they are required to make a TCO (269P). Once a TCO is made, the specified goods are subject to a lower rate of customs duty, which in this case is free instead of the general rate of 5% (269S).
Under this Act, the CEO has the obligation to evaluate each application for a TCO to ensure it meets the core criteria, which involves determining whether the goods are substitutable by Australian-produced goods (269C). If the application is deemed valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit any reasons why the TCO should not be granted (269K). Additionally, the CEO must ensure that the TCO does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO's registration (269S).
Breaching the conditions or requirements of a TCO, or failing to comply with the obligations set forth in the Customs Act, may result in civil or criminal penalties. The exact penalties can vary depending on the severity of the breach. For example, knowingly making a false statement in an application for a TCO could result in criminal charges, with potential penalties including fines and imprisonment. Civil penalties might also apply for non-compliance with the Act, and these can include fines up to a specified maximum amount as determined by the relevant legislation.