EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932405
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.
Origin Energy Power applied for a TCO in respect of switchyards on 02 September 2009.
Instrument
TCO No 0932405 was made on 24 February 2010. It declares that those certain switchyards 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. One submission objecting to the TCO application was received from Onesteel.
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. 0932405 is taken to have come into force on 02 September 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. 0932405, enacted under the Customs Act 1901, was introduced to facilitate tariff concessions for specific goods, thereby addressing the gap in the duty-free import scheme for certain products. This instrument was formulated to streamline the process for applying for and granting tariff concessions, ensuring that businesses can access necessary goods at a reduced or free rate of duty when certain conditions are met. The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs upon determining that an application meets the core criteria, such as the absence of substitutable goods produced in Australia. The objective of this legislative instrument, as outlined in the explanatory statement, is to enable the application of tariff concessions to specific goods, thereby promoting economic efficiency and providing relief to businesses that rely on the importation of these goods. The enactment of this instrument by the relevant authority under the Customs Act 1901 aims to facilitate smoother trade practices and reduce import costs for qualifying goods.
Scope and Application
The Tariff Concession Instrument No. 0932405 under the Customs Act 1901 pertains to the granting of tariff concessions on certain goods, in this case, switchyards, applied for by Origin Energy Power on 02 September 2009. The Act applies to any person or entity seeking tariff concessions for specific goods, provided these goods are not excluded under section 269SJ of the Act, which lists items ineligible for tariff concessions. The instrument was issued on 24 February 2010 by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia in the ordinary course of business, thereby meeting the core criteria set out in section 269C of the Act. The instrument effectively declares that the switchyards in question are subject to a zero rate of customs duty, down from the general rate of 5%, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The tariff concession does not retroactively affect any rights or liabilities of individuals or entities other than the Commonwealth, ensuring that those who imported the goods before the instrument's effective date of 02 September 2009 are not disadvantaged. The instrument also extends its application through subordinate instruments, facilitating broader implementation and compliance within the specified scope.
Key Provisions
The main operative sections of this legislation, particularly section 269F of the Customs Act 1901, allow for the application of Tariff Concession Orders (TCO) to certain goods. Specifically, section 269F enables a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. This is subject to the condition that the goods are not those specified in section 269SJ, which lists items ineligible for TCOs. Once the CEO accepts the application, they must determine if it meets the core criteria outlined in section 269C. This involves assessing whether, on the date the application was lodged, there were no substitutable goods produced in Australia in the ordinary course of business. The definitions provided in sections 269D, 269E, and 269F further clarify the meanings of terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the application meets these criteria, the CEO must issue a written TCO, as mandated by subsection 269P(3), specifying the applicable duty under Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on parties or entities are primarily centred around the application and approval process for TCOs. For instance, section 269K(1) stipulates that the CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit objections. This ensures transparency and allows for public scrutiny of the application process. Additionally, the TCO itself, as outlined in subsection 269S(1), is deemed to come into force on the day the application was lodged. This means that the concessions apply retroactively from the application date, although it does not affect any pre-existing rights or liabilities of third parties, as clarified under paragraph 126(1)(r) of the Regulations.
Offences, penalties, or civil/criminal consequences for breach of the provisions in the Act are not explicitly detailed in the text. However, the legislation's focus on ensuring the proper application and approval process for TCOs suggests that non-compliance with these procedures could potentially lead to legal ramifications. For example, if the CEO fails to follow the mandated steps in sections 269K(1) and 269P(3), this could result in the TCO being deemed invalid or subject to legal challenge. Although specific penalties are not outlined, breaches of customs regulations can generally lead to fines, imprisonment, or other civil and criminal consequences as prescribed by the relevant legislation.