EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932152
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 Pty Ltd applied for a TCO in respect of certain hydrogen extraction vessels on 10 August 2009.
Instrument
TCO No 0932152 was made on 30 October 2009. It declares that those certain hydrogen extraction vessels 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. 0932152 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 Australian Parliament, includes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. The purpose of this scheme is to apply lower rates of customs duty to goods that are the subject of a TCO. This legislation was introduced to address the gap in tariff concessions for specific goods, ensuring that where no substitutable goods are produced in Australia, the appropriate lower duty rates can be applied. This is achieved by allowing applications to be made to the CEO, who must then determine if the application meets the core criteria, such as the absence of substitutable goods produced in Australia. The instrument in question, TCO No. 0932152, was introduced to provide a tariff concession for certain hydrogen extraction vessels, granting them a duty-free status. This measure was intended to provide a beneficial effect on the rights of importers and did not disadvantage any person or impose liabilities for actions prior to the TCO's registration.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person who may apply for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act, which excludes certain goods from TCO consideration. The Act's jurisdictional reach is national, impacting all entities involved in the importation of goods across Australia. The application of a TCO is contingent on the core criteria outlined in section 269C, which stipulates that no substitutable goods must be produced in Australia in the ordinary course of business. Once the CEO determines that an application meets these criteria, a TCO is issued, as seen in TCO No. 0932152 for specific hydrogen extraction vessels, reducing the duty rate from 5% to free. This order, effective from the date of application, does not disadvantage or impose liabilities on any person except the Commonwealth and beneficially affects the rights of importers who can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The Tariff Concession Instrument No. 0932152, under the Customs Act 1901 (the Act), establishes a lower rate of customs duty for certain hydrogen extraction vessels, aligning with the provisions of item 50 in Schedule 4 of the Customs Tariff Act 1995 (the Tariff) (ss 269C, 269F, 269P). Specifically, section 269C states that a Tariff Concession Order (TCO) application is considered valid if no substitutable goods are produced in Australia on the day the application is lodged. Additionally, section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must issue a written TCO, which in this case is TCO No. 0932152.
The Act imposes certain obligations on applicants and the CEO. Firstly, any person can apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act (s 269F). The CEO must then assess whether the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia on the day the application was lodged (s 269C). If satisfied, the CEO must issue a written TCO (s 269P(3)). Furthermore, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (s 269K(1)).
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations may result in civil or criminal penalties. For instance, subsection 269K(3) of the Act stipulates that any person who provides false or misleading information in a TCO application may face a penalty. The specific penalties are not detailed in the explanatory statement but generally could include fines and imprisonment, as outlined under the respective sections of the Act. Additionally, any breach of the terms of a TCO could result in the revocation of the concession, as well as potential financial penalties for any duties unpaid or incorrectly claimed.
The Tariff Concession Instrument No. 0932152, effective from 10 August 2009, ensures that the rights of parties, other than the Commonwealth, are not adversely affected prior to the registration date of the TCO. Importers of the specified goods can apply for a refund of duty paid on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that the rights of importers are beneficially affected without any retroactive disadvantage.