EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836173
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 gas turbine air filter cartridge on 20 October 2008.
Instrument
TCO No 0836173 was made on 14 January 2009. It declares that those certain gas turbine air filter cartridge 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. 0836173 is taken to have come into force on 20 October 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 was enacted to facilitate the regulation of customs and excise duties in Australia. The Act includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, allowing for lower rates of customs duty on specified goods. The Tariff Concession Instrument No. 0836173, issued on 14 January 2009, is an example of such an order. This particular instrument was introduced in response to an application by Origin Energy Power Pty Ltd for a TCO concerning certain gas turbine air filter cartridges. The CEO of Customs determined that these goods were eligible for a tariff concession because no substitutable goods were produced in Australia, aligning with the core criteria outlined in the Customs Act 1901. The policy objective of this measure is to provide tariff relief on imported goods that are not domestically produced, thereby potentially benefiting importers by reducing their duty costs.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0836173, applies to the application process for Tariff Concession Orders (TCO) that reduce customs duty rates on specific goods. This instrument, which came into force on 20 October 2008, pertains to the application made by Origin Energy Power Pty Ltd for a TCO concerning certain gas turbine air filter cartridges. The TCO is applicable to the goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, and it was made on 14 January 2009 after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia in the ordinary course of business. The legislation ensures that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the date of registration, while allowing for potential duty refunds for importers of these goods from the date the TCO is deemed to have come into effect. The Act's scope is confined to the Commonwealth, and its application is not subject to any exclusions, exemptions, or thresholds as per the instrument itself, although the core criteria for TCO eligibility are outlined in the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 0836173, made under the Customs Act 1901, primarily establishes a concession on customs duty for certain gas turbine air filter cartridges. According to section 269P(3) of the Act, if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, a written order must be made declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, the CEO determined that the general duty rate of 5% does not apply to these goods, and instead, they are duty-free under item 50 of Schedule 4. This concession was made effective from 20 October 2008, the date on which the application was lodged (subsection 269S(1) of the Act).
The Customs Act 1901 imposes several obligations on parties applying for a TCO. Section 269C of the Act stipulates that an 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. Additionally, section 269B clarifies that "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269F respectively. The CEO must also consult the public by publishing a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1) of the Act). In this instance, no submissions were received in response to the published notice.
Failure to comply with the requirements of the Customs Act 1901 or any related regulations may result in various consequences. The Act does not explicitly outline specific offences or penalties related to non-compliance with TCOs. However, general provisions in the Act cover offences and penalties for breaches of customs laws. For instance, section 252 of the Customs Act 1901 provides for penalties for offences, which may include fines and imprisonment depending on the severity of the breach. While the specific penalties for breaches related to TCOs are not detailed in the explanatory statement, they would be subject to the general penalty provisions of the Act. It is essential for entities involved to adhere to the requirements to avoid any potential civil or criminal consequences.