EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905761
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.
Norske Skog Paper Mill applied for a TCO in respect of certain air supported belt conveyors on 19 February 2009.
Instrument
TCO No 0905761 was made on 15 May 2009. It declares that those certain air supported belt conveyors 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. 0905761 is taken to have come into force on 19 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 amended to introduce a scheme for Tariff Concession Orders (TCOs) under Part XVA, allowing for reduced customs duties on certain goods. This scheme was enacted to address the issue of providing tariff relief for goods where no domestic substitutes are available, thereby promoting competition and economic efficiency. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make these orders if an application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. Tariff Concession Instrument No. 0905761, made on 15 May 2009, is an example of this process, providing a tariff concession for certain air supported belt conveyors. The policy objective of this legislation is to ensure that the tariff concessions do not disadvantage any person or impose liabilities on anyone except the Commonwealth, while also benefiting importers by allowing them to apply for duty refunds on goods imported since the TCO came into force.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for Tariff Concession Orders (TCOs) which can be applied for by any person to reduce the customs duty on certain goods. These orders are issued by the Chief Executive Officer of Customs upon meeting certain criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. The application process requires the applicant to satisfy the CEO that the goods do not fall under the exclusions specified in section 269SJ. Once a TCO is approved, the reduced duty rate applies retroactively to the date the application was lodged, benefiting importers who may claim refunds for duties paid on such goods prior to the TCO's effective date. This legislation applies across Australia, encompassing all industries and entities involved in the importation of goods subject to these tariff concessions. The Act does not impose any liabilities on persons other than the Commonwealth, and its provisions do not affect existing rights as of the registration date. The scope of the Act can be extended or refined through subordinate instruments, such as regulations or orders, although the primary focus remains on facilitating tariff concessions for specific goods.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied in this particular Tariff Concession Instrument (section 269F), allow for the application process for a Tariff Concession Order (TCO) to be initiated by a person seeking a reduction in the duty on certain goods. If the application is deemed valid and meets the core criteria specified under section 269C, the Chief Executive Officer of Customs (CEO) is mandated to issue a TCO. This order effectively declares that the specified goods are subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995. In the specific case of TCO No. 0905761, the CEO accepted the application from Norske Skog Paper Mill for certain air supported belt conveyors, and subsequently issued the order, which took effect from 19 February 2009.
The obligations imposed on the parties governed by this Act are quite clear. The CEO must, upon receiving a valid TCO application, ensure that the application complies with the core criteria set out in section 269C. This involves confirming that no substitutable goods are produced in Australia at the time the application is made. Once these criteria are met, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions against the application. In this case, no submissions were received. Finally, the CEO must issue a TCO if the application is found to meet the criteria.
For breaches of the Act or non-compliance with the terms of a TCO, the Customs Act 1901 provides for various civil and criminal penalties. While the explanatory statement does not specify the exact nature of these penalties, it is reasonable to infer that they could include fines and other sanctions for non-compliance with the Act's requirements. Additionally, any failure to adhere to the terms of a TCO could potentially result in the invalidation of the concession, with the goods reverting to the standard duty rate. Importers, however, are afforded the opportunity to apply for a refund of duty paid on goods imported since the TCO came into force, as per the Regulations under paragraph 126(1)(r).
It is also important to note that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration. This ensures that no party is disadvantaged or subjected to liabilities for actions taken prior to the registration of the TCO. The rights of importers are specifically protected and potentially enhanced by the concession, as they stand to benefit from reduced duty rates on the specified goods.