EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929093
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.
Solvay Interox applied for a TCO in respect of certain hydrogen generation plant parts on 10 August 2009.
Instrument
TCO No 0929093 was made on 30 October 2009. It declares that those certain hydrogen generation plant parts 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. 0929093 is taken to have come into force on 10 August 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 Parliament of Australia, establishes a framework for the administration of customs duties and the regulation of imported goods. This Act introduced the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. These concessions are intended to provide relief from customs duties for specific goods, addressing gaps in availability and affordability for certain products by reducing or eliminating duty on imported items that are not produced domestically. The policy objective of this legislative scheme is to support economic efficiency and consumer choice by ensuring that Australians have access to a wide range of goods at competitive prices. Specifically, TCOs aim to facilitate the importation of goods that are not produced in Australia, thereby preventing any potential disadvantages to consumers and businesses due to a lack of local production.
Scope and Application
The Tariff Concession Instrument No. 0929093, made under the Customs Act 1901, applies to the concession of customs duties for certain hydrogen generation plant parts. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) for goods where a lower rate of customs duty is applicable, provided that the application meets the core criteria outlined in the Act. In this specific case, Solvay Interox applied for a TCO concerning certain hydrogen generation plant parts, and the CEO determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria. Consequently, the TCO was issued, granting a duty-free status to these goods, which previously had a general duty rate of 5%. The TCO applies to the named entities and goods, and its geographic reach is confined to Australia, governed by the Commonwealth.
The application of this TCO is limited to the specific goods identified in the Instrument and does not affect the rights of any person other than the Commonwealth, particularly ensuring no one is disadvantaged or incurs liabilities for actions prior to the TCO's effective date. The TCO's application can be further extended or restricted through subordinate instruments, although this particular Instrument does not indicate any additional measures. The Instrument came into force on the date the application was lodged, 10 August 2009, and no exclusions or exemptions are specified in the text.
Key Provisions
The primary operative sections of this legislation, specifically the Tariff Concession Order (TCO) No. 0929093, pertain to the tariff concessions applied to certain hydrogen generation plant parts (s. 269P(3)). This section mandates that the Chief Executive Officer (CEO) of Customs must issue a written order when satisfied that a TCO application meets the core criteria, as outlined in section 269C. Section 269SJ specifies the goods that are ineligible for a TCO, while section 269D, 269E and 269F detail the definitions of ‘goods produced in Australia’, ‘ordinary course of business’ and the application process, respectively. This particular TCO applies item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty rate from 5% to free for the specified goods.
The Act imposes several obligations on the parties involved. Solvay Interox, the applicant, must ensure that their application meets the core criteria as defined by section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, on the other hand, must review the application to verify that it complies with the Act, publish a notice in the Gazette inviting submissions (s. 269K(1)), and make a decision within the stipulated timeframe. Furthermore, the CEO is obligated to ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any new liabilities.
In terms of compliance and enforcement, the Act includes provisions for penalties and consequences in the event of non-compliance. While the explanatory statement does not specify particular offences or penalties, breaches of the Customs Act 1901 generally can result in civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties may include fines, while criminal penalties could involve imprisonment, reflecting the seriousness of the violation under Australian law.
The explanatory statement also clarifies that the TCO does not affect the rights of any person other than the Commonwealth or impose new liabilities. This means that existing rights and obligations of individuals and entities are preserved, and no new financial burdens are introduced. Importers of the affected goods can apply for a refund of duties paid on those goods imported since the date the TCO was taken to have come into force, as per paragraph 126(1)(r) of the Regulations. This provision ensures that those who have already imported the goods can benefit from the tariff concession without facing any retroactive liabilities.