EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829754
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 fibre pellets module asphalt plant on 05 September 2008.
Instrument
TCO No 0829754 was made on 28 November 2008. It declares that those certain fibre pellets module 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. 0829754 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 Customs Act 1901, enacted by the Parliament of Australia, addresses the need for a streamlined process to provide tariff concessions on specific goods. This Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to goods not produced in Australia in the ordinary course of business. The objective of this legislative instrument is to facilitate the importation of goods that are not domestically produced, thereby potentially lowering costs and improving accessibility for businesses and consumers. The process involves an application to the CEO, followed by a decision based on whether the goods meet the core criteria set out in the Act. In the case of Tariff Concession Instrument No. 0829754, the CEO issued a TCO for certain fibre pellets module asphalt plant, resulting in a duty-free rate for these goods, effective from the date of the application.
Scope and Application
The Tariff Concession Instrument No. 0829754, made under the Customs Act 1901, applies to the specific category of goods, namely certain fibre pellets module asphalt plant, as identified in the application by Downer Edi Works Pty Ltd. The legislation establishes a framework whereby the Chief Executive Officer of Customs (CEO) can grant a Tariff Concession Order (TCO) that results in a reduced customs duty rate for these goods, from the general rate of 5% to a rate of duty that is free. The scope of the Act extends to any person or entity that imports these goods, thereby directly affecting the rights of importers who will benefit from this tariff concession. The application of the TCO is confined to the goods specified in the order and does not extend to any other goods unless they are similarly subject to a TCO application and granted by the CEO. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person, including the rights of importers as they pertain to the refund of duties paid prior to the TCO's effective date. The application of the TCO is subject to the exclusions and criteria outlined in the Customs Act 1901 and related instruments, ensuring that the concessions are granted only when certain conditions are met, specifically when no substitutable goods are produced in Australia.
Key Provisions
The main operative sections of this legislation pertain to the creation and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO is satisfied that the application meets the core criteria as outlined in section 269C and does not involve goods specified in section 269SJ, they must make a written order declaring that the goods in question are subject to a particular tariff rate specified in the Customs Tariff Act 1995 (subsection 269P(3)). This means that the goods specified in the TCO will be subject to a lower customs duty rate. In this case, TCO No 0829754 declares that certain fibre pellets module asphalt plant are subject to a duty rate of free, rather than the general rate of 5%.
The obligations imposed by this Act on parties or entities it governs primarily concern the application process for TCOs. The CEO must ensure that the application for a TCO is valid and meets the core criteria (section 269C). This includes verifying that no substitutable goods are produced in Australia at the time of application, as defined in section 269D. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe there are reasons why the TCO should not be made. The CEO must consider any submissions received before making the final decision.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not specify explicit criminal penalties for failing to comply with the provisions related to TCOs. However, the Act does provide for civil consequences for non-compliance. For instance, if an entity fails to adhere to the terms of a TCO, it could face civil action for non-payment of customs duty or other penalties as outlined in the Customs Act 1901 and associated regulations. The maximum penalties for such breaches would depend on the specific nature of the non-compliance and could include fines or other financial penalties as determined by the relevant authorities.