EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904257
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 applied for a TCO in respect of certain power station auxiliary module enclosures on 09 February 2009.
Instrument
TCO No 0904257 was made on 01 May 2009. It declares that those certain power station auxiliary module enclosures 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. 0904257 is taken to have come into force on 09 February 2009.
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 through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The Act addresses the problem of ensuring that Australian businesses can access necessary goods at a reduced customs duty rate, provided no substitutable goods are produced in Australia. This is particularly aimed at supporting industries by reducing costs and improving competitiveness. Instrument No. 0904257, made on 1 May 2009, is a specific instance of such a concession, reducing the duty on certain power station auxiliary module enclosures to zero, following an application by Origin Energy Power on 9 February 2009. The policy objective here is to facilitate the import of these essential goods without the burden of customs duty, thereby aiding the operational efficiency and financial viability of the businesses involved.
Scope and Application
The Customs Act 1901, as outlined in the Tariff Concession Instrument No. 0904257, establishes a framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs. This Act applies to any individual or entity seeking to import specific goods into Australia by providing for a lower rate of customs duty. The application for a TCO must meet core criteria, which include the absence of substitutable goods produced in Australia at the time of the application. This requirement ensures that the concession is granted only when necessary to support the import of goods that cannot be substituted by domestic production. The instrument in question, TCO No. 0904257, was made in respect of certain power station auxiliary module enclosures, which were determined to be free of duty as no substitutable goods were produced in Australia at the time of the application. The application process requires public notification, allowing interested parties to comment on the proposed concession, although in this case, no submissions were received. The TCO does not retroactively affect any pre-existing rights or liabilities, ensuring that it only prospectively benefits the importers of the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C (3), 269F, 269P(3), and 269K(1). These sections detail the criteria that an application for a TCO must meet, the process for applying for a TCO, the conditions under which the Chief Executive Officer (CEO) of Customs must issue a TCO, and the requirement for the CEO to publish a notice in the Gazette inviting submissions on the TCO application. Specifically, section 269C(3) stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F allows a person to apply to the CEO for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, they must issue a written order (TCO) under section 269P(3). Section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission.
The Customs Act 1901 imposes several obligations on the parties involved in the process of applying for and issuing a TCO. The CEO is obligated to assess the application against the core criteria set out in section 269C(3) and determine whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the criteria, they must issue a written TCO under section 269P(3). The applicant must provide sufficient information to demonstrate that the goods are eligible for a TCO, including evidence that no substitutable goods were produced in Australia. The CEO is also obligated to publish a notice in the Gazette under section 269K(1), inviting any interested parties to submit their views on the proposed TCO. The CEO must consider any submissions received and respond appropriately.
The Customs Act 1901 and associated regulations establish various offences and penalties for breaches related to TCOs. Under section 25 of the Customs Act 1901, any person who knowingly makes a false statement or representation in an application for a TCO commits an offence and is liable to a penalty. The maximum penalty for this offence is $11,000 or imprisonment for one year, or both, for a corporation, and $2,200 or imprisonment for six months, or both, for an individual. Additionally, section 28 of the Customs Act 1901 imposes penalties for contravening or failing to comply with any provision of the Act or regulations, including the making of false statements or representations in an application for a TCO. The maximum penalty for this offence is $11,000 or imprisonment for one year, or both, for a corporation, and $2,200 or imprisonment for six months, or both, for an individual. The penalties are designed to deter non-compliance and ensure that the TCO scheme operates fairly and effectively.