EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917314
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 air separation units on 21 May 2009.
Instrument
TCO No 0917314 was made on 14 August 2009. It declares that those certain air separation units 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. 0917314 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 amended to introduce the scheme for Tariff Concession Orders (TCOs), which was enacted to facilitate the import of specific goods by applying a reduced rate of customs duty on them. This scheme was introduced to address the problem of ensuring that certain goods, which are not produced in Australia or for which no suitable substitute is available domestically, can be imported without imposing an undue financial burden on businesses or consumers. This instrument, Tariff Concession Instrument No. 0917314, was enacted by the Chief Executive Officer of Customs following an application from Callide Oxyfuel Services Pty Ltd for a TCO concerning certain air separation units. The primary objective of this legislation, as stated in the explanatory statement, is to ensure that no person (other than the Commonwealth) is disadvantaged or imposed liabilities due to the application of the TCO before its registration date. The Parliament of Australia established this mechanism to provide tariff relief where appropriate, thereby supporting the efficient operation of businesses and industries within the country.
Scope and Application
The Tariff Concession Instrument No. 0917314, pursuant to Part XVA of the Customs Act 1901, applies to the application process and implementation of Tariff Concession Orders (TCOs) concerning specific air separation units. The Act allows the Chief Executive Officer of Customs (CEO) to grant a TCO to an applicant if the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged. This instrument specifically addresses the application by Callide Oxyfuel Services Pty Ltd, for which the CEO granted a TCO after determining that no substitutable goods were produced domestically. The concession effectively reduces the duty on these units from a general rate of 5% to free, commencing on the date of the application, 21 May 2009. The geographic reach of this Act is nationwide, as it falls under the Commonwealth jurisdiction, and it does not disadvantage any existing rights or impose liabilities on persons other than the Commonwealth. The CEO published a notice in the Gazette inviting submissions, but none were received, leading to the issuance of the TCO.
Key Provisions
The main operative sections of this legislation include sections 269C, 269P, and 269S of the Customs Act 1901, which collectively facilitate the process of applying for and obtaining a Tariff Concession Order (TCO). Section 269C sets out the core criteria for a TCO application, requiring that no substitutable goods are produced in Australia on the day the application is lodged (269C). If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (269P(3)). Section 269S outlines the commencement date of a TCO, which is the date the application for the TCO was lodged (269S(1)).
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily on the CEO and the applicants for a TCO. The CEO must ensure that the application meets the core criteria and, if satisfied, make the TCO (269C, 269P). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who considers the TCO should not be made (269K(1)). For applicants, the primary obligation is to ensure that their application meets the core criteria, particularly that no substitutable goods are produced in Australia on the day the application is lodged (269C).
The legislation also outlines consequences for non-compliance or breaches. The Customs Act 1901 does not explicitly detail specific offences or penalties for failing to comply with the provisions related to TCOs. However, general provisions within the Act and associated regulations might apply, which could include fines or other penalties for non-compliance with customs duties and regulations. For instance, under the Customs Act, there are provisions for penalties for making false statements or providing misleading information, which could be relevant if an applicant provides incorrect information in their TCO application. The specifics of penalties would depend on the nature of the breach and any additional regulations or Acts that might apply.