EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904258
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 auxiliary module enclosures water injection on 09 February 2009.
Instrument
TCO No 0904258 was made on 01 May 2009. It declares that those certain auxiliary module enclosures water injection 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. 0904258 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 was enacted to facilitate the regulation of customs and excise, and the Tariff Concession Instrument No. 0904258 was introduced to address a specific gap within this framework. This instrument, which came into effect on 01 May 2009, provides for tariff concessions on certain auxiliary module enclosures water injection, effectively granting a zero percent duty rate on these goods, which contrasts with the general rate of five percent. This legislative instrument was developed in response to an application from Origin Energy Power, and the decision to grant the concession was based on the Chief Executive Officer of Customs being satisfied that no substitutable goods were produced in Australia. The policy objective here is to support industries by reducing the cost of imported goods, thereby encouraging their use and integration into Australian production processes where local alternatives do not exist. The instrument was developed following standard consultation procedures, with no objections raised to the proposed concessions.
Scope and Application
The Tariff Concession Instrument No. 0904258 under the Customs Act 1901 applies to individuals or entities that are seeking to import specific goods into Australia, namely certain auxiliary module enclosures water injection, for which a Tariff Concession Order (TCO) has been applied and approved. The Act is relevant to the Chief Executive Officer of Customs (CEO) who must determine whether an application for a TCO meets the core criteria, primarily by ensuring that no substitutable goods are produced in Australia. The scope of the Act covers the process of applying for and granting tariff concessions, thereby affecting the rates of customs duty applied to certain imported goods. Geographically, the Act applies throughout the Commonwealth of Australia, affecting all entities involved in the import of goods subject to a TCO. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which lists those goods that cannot be subject to a TCO. The application and approval process for a TCO can be extended through subordinate instruments, as outlined in the Customs Regulations 1996.
Key Provisions
The Tariff Concession Instrument No. 0904258 under the Customs Act 1901 applies to auxiliary module enclosures water injection, as detailed in Section 269P(3). This provision mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a Tariff Concession Order (TCO) application meets the core criteria (Section 269C), they must issue a written order declaring the goods subject to the application. In this instance, the CEO concluded that no substitutable goods were produced in Australia (Section 269D, 269E), leading to the issuance of TCO No. 0904258 on 1 May 2009. This order specifies that the auxiliary module enclosures water injection are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a general rate of duty of 5%, which is reduced to free under the TCO.
Entities or individuals applying for a TCO under Section 269F must ensure that their application is not in respect of goods specified in Section 269SJ, which outlines those ineligible for tariff concessions. The application must also meet the core criteria outlined in Section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is obligated to publish a notice in the Gazette (Section 269K(1)) inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received.
Breaching the conditions of a TCO could potentially lead to legal consequences. Although the explanatory statement does not explicitly detail the penalties for non-compliance, under the Customs Act 1901, breaches of the Act's provisions can result in civil or criminal penalties. These penalties may include fines or imprisonment, depending on the severity and nature of the breach. The TCO itself does not impose any liabilities on any person other than the Commonwealth and protects the rights of persons, ensuring they are not disadvantaged or imposed liabilities for actions taken before the TCO's registration.