EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829783
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 electrical and electronic control module asphalt plants on 05 September 2008.
Instrument
TCO No 0829783 was made on 28 November 2008. It declares that those certain electrical and electronic control module asphalt plants 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. 0829783 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 Australian Parliament, establishes a framework for the administration of customs duties, including the creation of Tariff Concession Orders (TCOs) to provide tariff concessions on specific goods. The Tariff Concession Instrument No. 0829783, issued in 2008, addresses the gap in the application of preferential tariff rates for certain electrical and electronic control module asphalt plants. This instrument was introduced to facilitate tariff concessions in instances where no substitutable goods are produced in Australia, thereby aligning with the policy objective of reducing the duty on specified goods to zero. The instrument was made effective from the date of the application, 5 September 2008, and does not impose any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) which lower the customs duty on certain goods. Any person can apply to the CEO for a TCO if the goods in question are not specified in section 269SJ, which lists goods ineligible for tariff concessions. The CEO must assess if the application meets the core criteria, primarily that no substitutable goods were produced in Australia on the application date. If these criteria are satisfied, the CEO issues a TCO, effectively applying a prescribed lower rate of duty from the application date, not retroactively affecting past imports or imposing new liabilities. Downer Edi Works Pty Ltd successfully applied for a TCO on electrical and electronic control module asphalt plants, reducing their duty rate from 5% to free under the specified tariff item. The CEO published a notice inviting objections to the TCO in the Gazette, but none were received. This instrument, TCO No 0829783, demonstrates the Act's mechanism for providing duty relief on certain imported goods, subject to defined conditions and exclusions.
Key Provisions
The main operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCO) are sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, 269SJ, and 269K. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines "goods produced in Australia," "ordinary course of business," and "substitutable goods" as used in the context of a TCO application. Section 269P mandates that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269K requires the CEO to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. Finally, section 269S establishes that a TCO is to be taken as coming into force on the day the application for the TCO was lodged.
The obligations and requirements imposed by the Act on parties and entities include ensuring that any application for a Tariff Concession Order is made in accordance with the provisions of section 269F and meets the core criteria outlined in section 269C. The CEO is required to assess whether the application meets these criteria and to make a written order if satisfied. Additionally, section 269K necessitates that the CEO publish a notice in the Gazette inviting any interested parties to lodge submissions against the making of the TCO. This ensures that the process is transparent and allows for any objections to be considered. Furthermore, the Act mandates that a TCO does not affect the rights of a person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO's registration.
The Act includes provisions for offences, penalties, and civil or criminal consequences for breaches. Although the specific penalties for non-compliance with the provisions regarding TCOs are not detailed in the provided text, it is known that the Customs Act 1901 generally includes provisions for penalties that may apply to breaches of its requirements. These penalties can include fines and, in some cases, imprisonment, depending on the severity and nature of the breach. For example, misleading or false statements made in an application for a TCO could result in penalties under section 271 of the Customs Act 1901, which addresses fraudulent or misleading statements. While the exact penalties are not specified in this context, they are likely to be significant to deter non-compliance and ensure the integrity of the TCO process.