EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910963
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.
Boc Ltd applied for a TCO in respect of certain nitrous oxide production plant on 01 April 2009.
Instrument
TCO No 0910963 was made on 19 June 2009. It declares that those certain nitrous oxide production 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. 0910963 is taken to have come into force on 01 April 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 Tariff Concession Instrument No. 0910963 was enacted in 2009 under the Customs Act 1901, which establishes a scheme for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument was introduced to address the need for providing tariff concessions on certain goods, specifically nitrous oxide production plant in this case, to facilitate more competitive pricing and potentially encourage industrial development in Australia. The Australian Parliament enacted this legislation to streamline the process for granting tariff concessions, ensuring that the application process and criteria are clearly defined and that affected parties can be appropriately consulted. The primary policy objective of this Act is to provide relief from customs duties on specific goods when it is determined that these goods are not being produced domestically, thereby preventing any undue disadvantage to domestic producers and encouraging the importation of goods where necessary.
Scope and Application
The Tariff Concession Instrument No. 0910963 under the Customs Act 1901 applies to specific goods for which an applicant seeks tariff concessions. The instrument is applicable to the goods specified in the application, which, in this case, are certain nitrous oxide production plants. The act allows for a lower rate of customs duty to be applied to these goods, provided that the application meets the core criteria set out in section 269C of the Act. The core criteria require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The application process involves an assessment by the Chief Executive Officer of Customs (CEO) to ensure that the goods do not fall under the prohibitions specified in section 269SJ of the Act. This legislation operates on a national level, as it is an instrument under the Commonwealth Customs Act 1901. The instrument has no geographical exclusions but is limited to the goods specified in the application and those that meet the statutory criteria. The application of the instrument is further refined through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable duty rates. The commencement date of the instrument is the date on which the application was lodged, thereby ensuring that the rights of any person, other than the Commonwealth, are not adversely affected by retroactive application of the concession.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0910963, under the Customs Act 1901, establish the framework for making Tariff Concession Orders (TCOs). Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. This application must meet certain criteria, primarily outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The term "substitutable goods" is defined in section 269D as goods produced in Australia that are put, or are capable of being put, to a use that corresponds with the use of the goods for which the TCO is being applied.
The obligations imposed on parties under this Act are quite specific. The CEO of Customs must evaluate the application against the core criteria mentioned above. If the application meets these criteria, the CEO is required to make a written TCO, as stipulated in section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who might oppose the TCO, as per section 269K(1). This process ensures transparency and allows for potential objections before the TCO is made.
There are no specific offences or penalties outlined in the legislation for the breach of a TCO or its requirements. However, failure to comply with the conditions set forth in a TCO could result in the goods being subject to the standard customs duty rates rather than the concessional rates. This is a civil consequence, but it could potentially lead to financial penalties if the goods are imported and duty is paid at the higher rate.
In summary, the Tariff Concession Instrument No. 0910963 provides a mechanism for reducing the customs duty on certain goods, provided that no substitutable goods are produced in Australia. The CEO of Customs has the responsibility to assess applications and make TCOs if the criteria are met. The process includes a public notice to allow for any objections, ensuring a fair and transparent application of the concessions. While there are no direct penalties for breaches, non-compliance could result in the concessional duty rates not being applied.