EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829971
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 cold feed module asphalt plant on 05 September 2008.
Instrument
TCO No 0829971 was made on 28 November 2008. It declares that those certain cold feed 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. 0829971 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. 0829971, enacted in 2008, is a legislative instrument under the Customs Act 1901, designed to address the need for tariff concessions on specific imported goods. This instrument facilitates the application of a lower rate of customs duty on certain goods, provided they meet specific criteria set out in the Act. The instrument was introduced by the Chief Executive Officer of Customs (CEO) in response to an application by Downer Edi Works Pty Ltd for a Tariff Concession Order (TCO) concerning certain cold feed module asphalt plant. The CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria for a TCO, and subsequently issued Instrument TCO No. 0829971, which applied a zero percent duty rate on these goods, down from the general rate of five percent. The policy objective behind this legislation is to encourage the importation of goods that are not locally produced, thereby benefiting importers and potentially stimulating economic activity by making imported products more competitive.
Scope and Application
The Tariff Concession Instrument No. 0829971 applies to the importation of certain cold feed module asphalt plant and the individuals or entities involved in such importations. This instrument is a subset of the Customs Act 1901, which is a Commonwealth Act. The act applies to all individuals and entities involved in the importation of goods into Australia, regardless of their location within the country. The scope of this particular instrument extends to granting tariff concessions on the specified goods, which are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively granting a duty-free status for these goods. The application of this instrument is contingent upon the absence of substitutable goods produced in Australia, as defined by the Act. The instrument does not impose any liabilities or affect existing rights negatively, but it does allow for the beneficial application of tariff concessions post its effective date.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0829971 under the Customs Act 1901, relate to the ability of the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) (section 269F). A TCO is made when the CEO is satisfied that an application for a TCO meets the core criteria, which is determined by assessing whether substitutable goods were produced in Australia on the day the application was lodged (section 269C). This is defined in the Act as goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put (section 269D, 269E, 269B). Once the CEO is satisfied that the application meets the core criteria, a TCO must be made, specifying 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 applies (subsection 269P(3)).
The obligations and requirements imposed by this Act on the parties it governs include the requirement for the CEO to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). If no submissions are received, the CEO can proceed to make the TCO. The Act also specifies that a TCO is taken to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)). This means that the TCO does not affect the rights of a person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not specify any particular offences or penalties in relation to the making of a TCO. However, it does specify that 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 Act also explicitly states that the TCO does not impose any liabilities on any person. Therefore, any breaches of the Act would likely be dealt with under the general provisions of the Customs Act 1901, which could potentially include fines or other penalties as determined by a court.