EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929713
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.
AE and E Australia applied for a TCO in respect of certain bed ash cooling conveyors on 13 August 2009.
Instrument
TCO No 0929713 was made on 06 November 2009. It declares that those certain bed ash cooling conveyors 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. 0929713 is taken to have come into force on 13 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 Australian Parliament, established a legislative framework governing customs and border control, including the provision for Tariff Concession Orders (TCOs). The Act was introduced to address the need for flexibility in customs duty rates to support specific economic and industrial policies. In particular, Part XVA of the Act facilitates the reduction of customs duties on certain goods through TCOs, which can be applied for by interested parties and approved by the Chief Executive Officer of Customs. The policy objective behind TCOs is to ensure that Australian industries are not unduly burdened by customs duties on goods that are not produced domestically, thus promoting fair competition and potentially aiding in the development of local industries. The legislative instrument, Tariff Concession Instrument No. 0929713, exemplifies this policy by providing a zero-rate duty on certain bed ash cooling conveyors, effective from the date of the application, thereby addressing a specific gap in the tariff structure for these goods.
Scope and Application
The Tariff Concession Instrument No. 0929713, made under Part XVA of the Customs Act 1901, applies to goods for which a Tariff Concession Order (TCO) has been sought and granted by the Chief Executive Officer of Customs. The Act allows for the reduction or exemption of customs duty on specific goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument specifically pertains to AE and E Australia's application for a TCO concerning certain bed ash cooling conveyors, resulting in these goods being subject to a duty rate of free, as opposed to the general rate of 5%. The scope of this legislation extends to ensuring that the application process is transparent and inclusive, requiring the publication of notices in the Gazette to invite submissions from interested parties, although in this case, no submissions were received. The TCO is effective from the date the application was lodged, 13 August 2009, and it does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, thus benefiting importers who can apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901, as supplemented by the Tariff Concession Order No. 0929713, outlines a process for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on specific goods. Under section 269F, any individual or entity can apply to the CEO for a Tariff Concession Order (TCO) concerning particular goods. The CEO then assesses the application against criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for key terms such as 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are provided in sections 269B, 269D, and 269E respectively. If the application meets these core criteria, the CEO is mandated by section 269P(3) to issue a written TCO, specifying the goods and the applicable tariff concession.
Entities and individuals governed by the Customs Act 1901 must adhere to the outlined procedures for applying for a TCO. This involves submitting a formal application to the CEO, ensuring that all criteria are met as per the statutory definitions. The CEO is required under section 269K(1) to publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the concession. This transparency ensures that the decision-making process is open and that all relevant stakeholders have the opportunity to provide input. Once a TCO is issued, it becomes effective on the date the application was lodged, as stipulated by subsection 269S(1), with no retroactive liabilities imposed on any party.
Non-compliance with the requirements of the Customs Act 1901 and the subsequent TCO can lead to significant consequences. Although the explanatory statement does not explicitly detail the penalties for breach, it is implied that failure to adhere to the stipulated processes or the terms of the TCO could result in legal ramifications. The Act itself, however, does not outline specific offences, penalties, or civil/criminal consequences within this context, suggesting that the primary focus is on procedural compliance and the facilitation of tariff concessions rather than punitive measures. Nonetheless, any deviation from the prescribed process could potentially invoke broader legal scrutiny under the overarching Customs Act 1901, leading to administrative or judicial consequences as deemed appropriate by the relevant authorities.