EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917313
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.
Callide Oxyfuel Services Pty Ltd applied for a TCO in respect of certain oxyfuel boilers on 21 May 2009.
Instrument
TCO No 0917313 was made on 14 August 2009. It declares that those certain oxyfuel boilers 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. 0917313 is taken to have come into force on 21 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 was enacted to provide for the regulation of customs and excise, including the administration of customs and excise duties. The Act, as amended, established a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to provide tariff concessions on specific goods. The problem or gap this legislation aimed to address was the need for a structured process to grant tariff concessions for imported goods that do not have Australian-made substitutes, thereby encouraging trade and industry development. This instrument was made by the Chief Executive Officer of Customs and is in response to an application from Callide Oxyfuel Services Pty Ltd for tariff concessions on certain oxyfuel boilers. The policy objective is to facilitate the importation of goods that have no substitutable Australian-made equivalents, thereby supporting industry and economic growth. The explanatory statement clarifies that no submissions were received opposing the TCO, and it came into force on the date the application was lodged, benefiting importers by potentially allowing them to claim refunds of duty paid on the specified goods since that date.
Scope and Application
The Tariff Concession Instrument No. 0917313, made under the Customs Act 1901, applies to specific goods—namely, certain oxyfuel boilers—in relation to which Callide Oxyfuel Services Pty Ltd applied for tariff concessions. The instrument applies to the goods as specified in the application, which must meet the core criteria set out in the Customs Act 1901, particularly that no substitutable goods were produced in Australia at the time of application. The instrument was made on 14 August 2009, and it declares that the mentioned oxyfuel boilers are subject to a concession, granting them a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general rate of 5%. The instrument has retrospective effect, coming into force on the day the application was lodged, which was 21 May 2009. It is important to note that the instrument does not disadvantage any person other than the Commonwealth or impose liabilities on anyone in relation to actions taken before its registration. Importers, however, will benefit from the rights to apply for duty refunds on imports of these goods since the effective date of the instrument.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, as outlined in section 269F. This mechanism enables the Chief Executive Officer of Customs (the CEO) to apply a lower rate of customs duty on specific goods, provided certain criteria are met. A person can apply to the CEO for a TCO concerning goods, and if the application is deemed valid and not in relation to goods specified in section 269SJ of the Act, the CEO must determine if the application meets the core criteria (section 269C). This involves ensuring that, on the date the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business. The definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they must issue a written order (section 269P(3)) declaring that the goods specified in the application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying the specified duty rate.
The obligations imposed by the Act on the parties involved primarily revolve around the application and assessment process for TCOs. The CEO is tasked with evaluating the validity of TCO applications and ensuring they comply with the stipulated criteria. This includes the requirement to publish a notice in the Gazette, as per subsection 269K(1), inviting any person who believes the TCO should not proceed to submit their reasons to the CEO. In the case of TCO No. 0917313, the CEO did not receive any submissions against the TCO. Furthermore, the Act stipulates that a TCO takes effect on the date the application is lodged (subsection 269S(1)), and this TCO does not impact any existing rights of persons other than the Commonwealth or impose any new liabilities on any person. Importers of the goods subject to the TCO are entitled to apply for a refund of duty paid on those goods since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Regarding potential breaches of the Act, it is crucial to note that any non-compliance with the provisions governing the application and issuance of TCOs could lead to legal consequences. While specific offences and penalties are not detailed within the scope of this explanatory statement, general contraventions of the Customs Act 1901 may result in civil or criminal penalties. Civil penalties may include fines and other financial penalties, while criminal offences could lead to imprisonment, depending on the severity of the breach. The exact penalties would be determined based on the specific circumstances of the breach and the relevant provisions of the Act.