EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914746
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 natural gas and steam reformer on 04 May 2009.
Instrument
TCO No 0914746 was made on 24 July 2009. It declares that those certain natural gas and steam reformer 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. 0914746 is taken to have come into force on 04 May 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 Parliament of Australia, provides a framework for the administration of customs duties and the regulation of goods entering and leaving the country. To address the need for flexible tariff adjustments that can respond to specific economic conditions and support industry competitiveness, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can provide tariff concessions on certain goods under specific conditions, thereby facilitating the importation of goods that are not produced domestically and promoting economic efficiency. In this context, Tariff Concession Instrument No. 0914746 was introduced to provide tariff relief on certain natural gas and steam reformers, ensuring that these goods benefit from a reduced customs duty rate in line with the policy objective of enhancing competitiveness and supporting industry growth.
Scope and Application
The Tariff Concession Instrument No. 0914746 applies to the customs duty concessions for certain natural gas and steam reformers as per the Customs Act 1901. Specifically, it pertains to applications made by entities such as Boc Ltd, which sought a tariff concession order (TCO) for these goods. The legislation enables the Chief Executive Officer of Customs (CEO) to grant concessions if the goods are not substitutable by any produced in Australia and meet the criteria outlined in the Act. The geographic scope of this Act is national, as it operates under the federal jurisdiction of Australia. The application process involves the CEO evaluating whether the goods are unique in their production and use within Australia, and if so, issuing a TCO that reduces or eliminates customs duty on these goods. This concession applies from the date of the application, retroactively benefiting the rights of importers who can seek duty refunds for imports made since this date. The Act does not disadvantage any person other than the Commonwealth and imposes no new liabilities.
Key Provisions
The primary operative sections of the Customs Act 1901, as relevant to Tariff Concession Orders (TCO), are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO determines that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C, the CEO must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This results in a lower rate of customs duty or, in some cases, no duty at all.
The Customs Act imposes certain obligations and requirements on the parties involved in the TCO process. When a TCO application is submitted, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO, as per section 269K(1). Additionally, the CEO is required to ensure that the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269B, 269D, and 269E. If the application meets these criteria, the CEO must make a TCO as stipulated in section 269P(3).
In terms of breaches and penalties, the Customs Act does not explicitly outline specific offences or penalties for failing to comply with the requirements of a TCO. However, any breaches of the Act's provisions or associated regulations may result in civil or criminal consequences. For example, the importation of goods without the appropriate duty paid could lead to penalties under the Customs Act and associated regulations. The severity of penalties depends on the nature and extent of the breach, and can include fines and, in more serious cases, imprisonment. It is important to note that the TCO does not affect the rights of a person as at the date of registration and does not impose any liabilities on any person, as per subsection 269S(1).