EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933510
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 And D Australia applied for a TCO in respect of certain vapour phase drying plant on 08 September 2009.
Instrument
TCO No 0933510 was made on 20 November 2009. It declares that those certain vapour phase drying plant 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. 0933510 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods. This legislative instrument aims to address the gap in providing tariff relief for specific goods that are not produced domestically, thus encouraging import and trade. In this context, Tariff Concession Instrument No. 0933510 was introduced on 20 November 2009, following an application by Areva T And D Australia for a TCO concerning certain vapour phase drying plant. The application was deemed valid as no substitutable goods were produced in Australia at the time. The TCO, which came into force on 8 September 2009, eliminates the 5% general duty on these goods, providing a zero-duty rate instead. The policy objective is to support the import of goods that are essential and not locally produced, thereby benefiting importers and fostering economic activity.
Scope and Application
The Tariff Concession Instrument No. 0933510, under the Customs Act 1901, pertains to a specific application for tariff concessions submitted by Areva T And D Australia for certain vapour phase drying plant. This instrument applies to the named goods and the specific entity that applied for the concession. The geographic scope of this legislation is national, as it involves the Commonwealth of Australia and the application of federal customs laws. The Act applies to any entity that seeks tariff concessions for goods not produced in Australia, ensuring that only non-domestically produced goods are eligible for the reduced duty rates specified in the Tariff Concession Order. Exclusions under this Act include goods specified in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The application of this instrument is further defined and potentially extended through subordinate instruments such as regulations, which may provide additional criteria or specifications for eligibility and enforcement.
Key Provisions
The Tariff Concession Instrument No. 0933510 under the Customs Act 1901 (section 269F) establishes the process for applying for a Tariff Concession Order (TCO), which allows for a lower rate of customs duty on specified goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application for a TCO is valid and meets the core criteria (section 269C), they must make a written order specifying that the goods in question are subject to a particular rate of duty outlined in the Customs Tariff Act 1995. In this instance, the CEO determined that certain vapour phase drying plant qualified for a TCO, resulting in the application of a free rate of duty as opposed to the general 5% rate.
Under the Customs Act 1901, the CEO has specific obligations when processing a TCO application. Firstly, the CEO must verify that the application is not for goods that are explicitly excluded under section 269SJ of the Act. Secondly, the CEO must determine whether the application meets the core criteria, which involves establishing that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Substitutable goods are defined in section 269D of the Act, while ordinary course of business is defined in section 269E. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)).
The Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for breaches related to TCO applications. However, any misuse or fraudulent application could potentially lead to legal consequences under general provisions of the Act or other relevant legislation. For instance, providing false information in an application could be considered an offence under the Commonwealth Crimes Act 1914, which carries penalties such as fines or imprisonment. Similarly, any actions taken in bad faith could result in civil liability for damages under general tort law. It is important for applicants and the CEO to adhere to the legal requirements and processes outlined in the Act to avoid any potential legal repercussions.