EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933888
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 and winding transporters on 10 September 2009.
Instrument
TCO No 0933888 was made on 27 November 2009. It declares that those certain transformer and winding transporters 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. 0933888 is taken to have come into force on 10 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 Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be implemented to provide preferential tariff rates on specific goods. The primary objective of this Act is to facilitate the import of goods that are not produced domestically, thereby benefiting consumers and businesses by potentially lowering the cost of imported goods. In this context, Tariff Concession Instrument No. 0933888 was introduced to address the need for tariff concessions for certain transformer and winding transporters, ensuring that these goods are subject to a zero rate of customs duty, as opposed to the standard 5% duty, provided no substitutable goods are produced in Australia. The instrument was implemented following an application by Areva T&D Australia and was effective from the date the application was lodged, 10 September 2009. The instrument's policy objective is to provide tariff relief on goods that are not domestically produced, thereby promoting competitive pricing and accessibility for these specific goods in the Australian market.
Scope and Application
The Customs Act 1901, as amended and applied through the Tariff Concession Instrument No. 0933888, provides a framework for the Chief Executive Officer of Customs to grant tariff concessions on certain goods, thus applying reduced rates of customs duty. This legislation applies to individuals and entities seeking tariff concessions for specific goods, provided these goods are not listed in section 269SJ of the Act, which prohibits certain goods from being subject to a tariff concession order (TCO). The scope of the Act extends to any goods for which an application is made under section 269F, provided the application meets the core criteria outlined in section 269C, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, applying across Australia in accordance with Commonwealth law. The instrument itself, TCO No. 0933888, was made effective from the date the application was lodged, 10 September 2009, and it exempts the specified transformer and winding transporters from the general rate of duty, granting them a free rate instead. The legislation does not disadvantage any existing rights of persons other than the Commonwealth and imposes no new liabilities, while benefiting importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The key operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business, the CEO must make a written order declaring that the goods are subject to a lower rate of customs duty (section 269P(3)). Section 269S specifies that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes certain obligations on the parties involved. The CEO must decide whether an application for a TCO meets the core criteria, as defined in section 269C. If satisfied, the CEO must make a written order declaring the goods to which the TCO applies. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). The TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, ensuring that no existing rights are disadvantaged or liabilities imposed on anyone due to the TCO (subsection 269S(1)).
Under the Act, there are no direct offences or penalties specified for breach of the provisions related to TCOs. However, the Act does provide mechanisms for recourse in cases of unfair or improper application of the concession. For instance, if an entity feels that a TCO has been granted improperly, they may seek judicial review under the Administrative Decisions (Judicial Review) Act 1977. This review process is not an offence per se but allows for the correction of any administrative errors that may have occurred in the grant of a TCO.
In summary, the Customs Act 1901 establishes a framework for the CEO to consider and grant TCOs, ensuring that applications meet specific criteria and that the rights of third parties are protected. While the Act does not prescribe penalties for breach, it provides avenues for review and correction of any administrative errors. The TCOs, once granted, provide a lower rate of customs duty on specified goods, benefiting importers by potentially allowing them to apply for duty refunds on goods imported since the TCO came into force.