EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927032
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.
Esso Australia Resources applied for a TCO in respect of certain hydraulic and electronic subsea control modules on 28 July 2009.
Instrument
TCO No 0927032 was made on 09 October 2009. It declares that those certain hydraulic and electronic subsea control modules 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 0927032. is taken to have come into force on 28 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 Australian Parliament, established a framework for the regulation of customs and excise duties, along with other related matters. One of the mechanisms introduced by the Act is the Tariff Concession Order (TCO), which provides for a lower rate of customs duty on certain goods, subject to specific criteria. The explanatory statement for Tariff Concession Instrument No. 0927032, issued under the Customs Act, details the process and criteria for granting a TCO, focusing on the application by Esso Australia Resources for hydraulic and electronic subsea control modules. The policy objective of this legislation is to ensure that goods eligible for tariff concessions are those for which no suitable Australian-made alternatives exist, thereby encouraging domestic production where possible while providing relief for certain imported goods.
Scope and Application
The Tariff Concession Instrument No. 0927032 under the Customs Act 1901 applies to goods specified in the instrument, namely certain hydraulic and electronic subsea control modules, and provides them with a concession on customs duty. This instrument is applicable to the entity that submitted the application for the tariff concession order, in this case Esso Australia Resources. The scope of this legislation is limited to the customs duty on these specific goods, and it does not extend to any other goods or services. The geographic reach of this legislation is national, as it applies to goods imported into Australia. However, it should be noted that the Act provides exclusions for certain goods specified in section 269SJ of the Customs Act 1901. The application of the Act can be extended or restricted through subordinate instruments, as outlined in the Customs Tariff Act 1995.
Key Provisions
The key sections of this legislation relate to the process for applying for and granting Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods. The CEO must then decide if the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets the criteria, they must make a written TCO as per section 269P(3). This process was followed in TCO No 0927032, which was made in respect of certain hydraulic and electronic subsea control modules.
The Act imposes certain obligations on the CEO in relation to TCO applications. The CEO must ensure that the application is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must also ensure that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must publish a notice in the Gazette inviting submissions in relation to the application, as per subsection 269K(1). If the CEO is satisfied that the application meets the core criteria, they must make a written TCO as per section 269P(3).
The Act does not provide for any offences or penalties in relation to TCOs. However, the TCO does not affect the rights of any person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. Importers of goods subject to a TCO may be able to apply for a refund of duty paid on those goods under the Customs (Refunds) Regulations 1995.