EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927436
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.
Eraring Energy Pty Ltd applied for a TCO in respect of certain steam turbine hydraulic power system on 30 July 2009.
Instrument
TCO No 0927436 was made on 16 October 2009. It declares that those certain steam turbine hydraulic power 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. 0927436 is taken to have come into force on 30 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, addresses the need for a systematic approach to managing customs duties, including the ability to offer tariff concessions for certain goods. Specifically, Part XVA of the Act provides for Tariff Concession Orders (TCOs), which can reduce the rate of customs duty applied to goods. This provision was designed to ensure that Australian businesses can access necessary imported goods at a reduced cost when locally produced alternatives do not exist. The Tariff Concession Instrument No. 0927436, made on 16 October 2009, exemplifies this mechanism by granting a tariff concession to Eraring Energy Pty Ltd for certain steam turbine hydraulic power systems. The primary objective of this concession, as outlined in the explanatory statement, is to support Australian industries by making imported goods more affordable, thereby fostering competitiveness and economic efficiency. The instrument does not disadvantage any existing rights holders or impose new liabilities, ensuring a smooth transition for all parties involved.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) under Part XVA. These orders facilitate lower customs duty rates for specified goods, contingent upon the CEO’s satisfaction that no substitutable goods are produced in Australia in the ordinary course of business. The application process involves the CEO reviewing the application to ensure it does not pertain to goods explicitly excluded under section 269SJ of the Act. If the application meets the core criteria, as outlined in section 269C, the CEO issues a TCO specifying a reduced duty rate for the goods. In the case of Tariff Concession Instrument No. 0927436, the CEO approved a TCO for certain steam turbine hydraulic power systems, effective from 30 July 2009, under item 50 of Schedule 4 to the Customs Tariff Act 1995, with the general duty rate of 5% reduced to free. The TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth, and it benefits importers who can apply for a refund of duties paid on the goods since the date of the TCO’s effect.
Key Provisions
The Tariff Concession Instrument No. 0927436 under the Customs Act 1901 primarily revolves around the application of tariff concession orders (TCOs) to specific goods, as outlined in section 269F. This legislative instrument was created in response to an application by Eraring Energy Pty Ltd for a TCO on certain steam turbine hydraulic power systems, which was lodged on 30 July 2009. Pursuant to section 269C, the Chief Executive Officer of Customs (CEO) assessed the application to determine whether it met the core criteria. These criteria include, most notably, ensuring that no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D, 269E, and 269P of the Act.
The obligations imposed by this legislation on the CEO include the duty to evaluate whether the TCO application meets the core criteria, as specified in section 269C. Once the CEO determines that the application meets the criteria, they must proceed to issue a written TCO under section 269P(3). This involves declaring that the goods in question are subject to a prescribed tariff item specified in the order. In the case of Eraring Energy Pty Ltd's application, the CEO found that no substitutable goods were produced in Australia and subsequently issued TCO No. 0927436, which applies to the specified steam turbine hydraulic power systems.
Failure to comply with the provisions of the Customs Act 1901 can result in significant legal repercussions. While the explanatory statement does not detail specific offences or penalties under this particular TCO, general breaches of the Customs Act can lead to both civil and criminal penalties. Civil penalties may include fines up to $22,200 per offence for individuals and significantly higher amounts for corporations, as outlined in section 284 of the Act. Criminal penalties can include imprisonment for up to five years for serious breaches, as stipulated in section 285. The exact penalties would depend on the nature and severity of the breach.
In summary, the Tariff Concession Instrument No. 0927436, under the Customs Act 1901, facilitates the application of tariff concessions to specific goods, provided the application meets the core criteria. The CEO has the responsibility to evaluate and issue TCOs accordingly. Non-compliance with the Act's provisions can result in substantial civil and criminal penalties, underscoring the importance of adhering to the statutory requirements.