EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0921209
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.
IHI Engineering Australia Pty Ltd applied for a TCO in respect of certain turbine power station filter houses on 22 June 2009.
Instrument
TCO No 0921209 was made on 11 September 2009. It declares that those certain turbine power station filter houses 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. 0921209 is taken to have come into force on 22 June 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 by the Parliament of Australia and includes provisions for the application of tariff concession orders (TCOs) to certain imported goods, allowing for reduced customs duty rates. The Tariff Concession Instrument No. 0921209, made under this Act, was introduced to address the need for tariff concessions in specific circumstances, particularly for goods that are not produced domestically and are not listed in the exceptions under section 269SJ. The instrument was created following an application by IHI Engineering Australia Pty Ltd for a TCO concerning turbine power station filter houses. The instrument came into force on the date the application was lodged, 22 June 2009, and provides for these goods to be subject to a zero rate of duty, down from the general rate of 5%, as no substitutable goods were being produced in Australia at the time of the application. The process involved consultation through the publication of a notice in the Gazette, inviting submissions, though none were received.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the rate of customs duty on certain goods. This legislation applies to individuals or entities that seek tariff concessions on goods, provided that the goods are not specified in section 269SJ of the Act as ineligible for such concessions. A TCO may be granted if the CEO determines that no substitutable goods are produced in Australia, as defined under sections 269D and 269E of the Act, and the application meets the core criteria outlined in section 269C. The scope of the Act extends to the national level, as it is a Commonwealth Act, and it affects the rights of importers by allowing them to apply for duty refunds on goods imported after the TCO comes into force, without imposing any new liabilities on persons other than the Commonwealth. The application of the Act can also be extended or restricted through subordinate instruments, although this particular TCO does not impose any liabilities and only benefits importers by potentially reducing duty costs.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0921209 (TCO) are sections 269C, 269B, and 269P of the Customs Act 1901. Section 269C outlines that a TCO application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines the terms "goods produced in Australia", "ordinary course of business", and "substitutable goods" in relation to the goods subject to the TCO application. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties involved. Firstly, any person can apply to the CEO for a TCO under section 269F, provided the goods are not specified in section 269SJ of the Act. The CEO must then assess whether the application meets the core criteria as per sections 269C and 269B. If satisfied, the CEO must make a TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, though in this instance, no submissions were received.
The Act also outlines the potential civil and criminal consequences for breaches. If a person knowingly makes a false or misleading statement in an application for a TCO, they may be subject to penalties under the Crimes Act 1914, which include fines of up to $22,200 for individuals and $111,000 for corporations, as well as potential imprisonment. Additionally, under section 126 of the Customs Regulations 1993, importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force, without any liabilities imposed on any person other than the Commonwealth. The TCO itself does not disadvantage any person or impose liabilities in respect of anything done or omitted before the date of registration.