EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932238
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.
Areva T&D Australia applied for a TCO in respect of certain transformer explosion protection system on 31 August 2009.
Instrument
TCO No 0932238 was made on 20 November 2009. It declares that those certain transformer explosion protection 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. 0932238 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0932238 was enacted in 2009 under the Customs Act 1901, aiming to address the need for tariff concessions on specific imported goods to promote economic efficiency and international competitiveness. The instrument was introduced to facilitate a lower rate of customs duty for goods that are not produced domestically or have no suitable substitutes produced in Australia, thereby encouraging the importation of necessary goods and services. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make Tariff Concession Orders based on applications, provided they meet the core criteria set out in the Act. The objective is to ensure that the application for tariff concession is not in respect of goods that are explicitly excluded and that no substitutable goods are produced in Australia. The instrument was published in the Gazette, inviting public submissions, though none were received. The tariff concession order came into effect on the date the application was lodged, offering significant benefits to importers of the specified goods, including potential refunds of duties paid on imports since the commencement date.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, facilitates the application of reduced customs duties on certain imported goods. Specifically, under this scheme, an applicant can seek a TCO from the Chief Executive Officer of Customs (CEO) if the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C of the Act, primarily that no substitutable goods are produced in Australia in the ordinary course of business, a TCO will be issued. This instrument applies nationally across Australia, governed by the Commonwealth. The TCO instrument is effective from the date the application is lodged, and it does not impose any liabilities on persons other than the Commonwealth, nor does it disadvantage anyone by affecting rights as at the date of registration for actions taken prior to the registration date. Importers stand to benefit from this instrument, as they may apply for a refund of duties on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901, as outlined in the explanatory statement, pertain to the making and effect of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the CEO determines that the application is valid and meets the core criteria set out in section 269C, the CEO is obligated to make a written order, as specified in section 269P(3), that declares the goods subject to a prescribed rate of customs duty. The application process involves ensuring that no substitutable goods are produced in Australia, as defined by sections 269D and 269E, and that the goods do not fall under the restricted list in section 269SJ.
The obligations imposed by the Act on the parties involved, particularly the CEO, include accepting valid applications for TCOs, determining whether they meet the core criteria, and making appropriate written orders if the criteria are met. Additionally, the CEO must publish a notice in the Gazette under subsection 269K(1) inviting submissions from any interested parties regarding the application. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO comes into effect, as stipulated in subsection 269S(1).
In terms of consequences for non-compliance, the explanatory statement does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaching the provisions of the Act. However, it is implied that any failure to adhere to the stipulated procedures for making or enforcing a TCO could result in legal challenges or administrative consequences. The TCO itself is designed to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into effect, as mentioned in paragraph 126(1)(r) of the Regulations. This benefit, however, is contingent upon compliance with the statutory requirements set forth in the Act.