EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922650
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.
John Holland & Thiess Pty Ltd applied for a TCO in respect of certain canopy tube drilling system on 01 July 2009.
Instrument
TCO No 0922650 was made on 25 September 2009. It declares that those certain canopy tube drilling system 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. 0922650 is taken to have come into force on 01 July 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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties in Australia. It includes provisions for the creation of Tariff Concession Orders (TCOs) under section 269F, which allow for the application of lower rates of customs duty on certain goods. The problem this legislation addresses is the potential economic disadvantage faced by Australian businesses if they cannot compete with imported goods due to higher customs duty rates. The policy objective is to provide a mechanism through which businesses can apply for tariff concessions, thereby ensuring that Australian industries are not unfairly disadvantaged by the absence of local production of certain goods. Tariff Concession Instrument No. 0922650 was made under this Act to provide tariff concessions for a specific canopy tube drilling system, recognising that no substitutable goods were produced in Australia at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 0922650 under the Customs Act 1901 applies to the specific goods in question, namely certain canopy tube drilling systems, for which John Holland & Thiess Pty Ltd submitted an application. This Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce customs duty rates for goods that meet certain criteria. The instrument was made on 25 September 2009, following the CEO’s determination that no substitutable goods were being produced in Australia, aligning with the conditions set out in section 269C of the Act. This TCO specifically affects the importation of the specified drilling systems by reducing their customs duty from 5% to free. The instrument's scope is limited to these particular goods, and it does not apply to other types of goods or industries unless similarly qualified applications are submitted and approved. Jurisdictionally, the Act operates at the Commonwealth level, with the TCO affecting the entire country uniformly. The Act does not impose any new liabilities on individuals or entities other than the Commonwealth and preserves existing rights, ensuring no retrospective disadvantage to parties dealing with the goods before the TCO was registered.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0922650 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer (CEO) of Customs to make a written order, known as a Tariff Concession Order (TCO), if satisfied that the application for a TCO meets the core criteria (section 269C). This order declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a concession on the rate of duty. In this case, TCO No. 0922650 was made on 25 September 2009, declaring that certain canopy tube drilling systems are subject to a free rate of duty as they are considered not substitutable by goods produced in Australia.
The obligations and requirements imposed by the Act on the parties involved primarily focus on the application process and the criteria for making a TCO. For instance, an applicant must ensure their application is not in respect of goods specified in section 269SJ of the Act and that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO has the responsibility to assess the application against these criteria and, if satisfied, to make a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO (subsection 269K(1)). Once the TCO is made, it is taken to have come into force on the day the application was lodged (subsection 269S(1)), providing immediate benefit to importers who can apply for a refund of duty on goods imported since the TCO's effective date.
The Act includes provisions for penalties and consequences for non-compliance with its requirements. However, the explanatory statement does not detail specific offences or penalties related to breaches of the TCO process itself. Instead, it focuses on the operational and procedural aspects of making and implementing a TCO. The rights of importers are protected, ensuring they can benefit from the TCO without incurring any liabilities for actions taken before the TCO's registration date. This protection underscores the importance of adhering to the procedural requirements and criteria set out in the Act to avoid any legal repercussions.