EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946408
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 certain gas turbine water injection unit on 07 January 2009.
Instrument
TCO No 0946408 was made on 03 April 2009. It declares that those certain gas turbine water injection unit 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. 0946408 is taken to have come into force on 07 January 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. 0946408 was enacted under the Customs Act 1901, aiming to address the need for tariff concessions that benefit Australian businesses by reducing customs duty on certain imported goods. This instrument was introduced to streamline the process of applying for and receiving tariff concessions, thereby facilitating trade and economic efficiency. The instrument was created following an application by Origin Energy Power for a tariff concession on certain gas turbine water injection units, which was subsequently approved by the Chief Executive Officer of Customs. The objective was to ensure that no substitutable goods were produced in Australia, thereby justifying the tariff concession. The instrument was published in the Gazette, inviting public submissions, although none were received. The tariff concession came into force on the date of the application, 7 January 2009, and it provides for a reduced duty rate of 5% to free, benefiting importers by potentially allowing them to claim refunds for duties paid before the concession was effective.
Scope and Application
The Tariff Concession Instrument No. 0946408, pursuant to Part XVA of the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been approved by the Chief Executive Officer of Customs (CEO). This legislation allows for a lower rate of customs duty on goods that are subject to a TCO, provided the application for the concession meets the core criteria outlined in the Act. Specifically, a TCO application is valid if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This applies to entities or individuals who have applied for a TCO, such as Origin Energy Power which applied for a TCO for certain gas turbine water injection units on 7 January 2009. The instrument, made on 3 April 2009, declared that these units are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with a general duty rate of 5% reduced to free under the TCO. The CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, although in this instance, no submissions were received. The TCO's commencement date aligns with the date of the application, 7 January 2009, and it does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO). Specifically, section 269F of the Act allows for an application to be made to the CEO for a TCO concerning particular goods. The CEO must then assess whether the application complies with the core criteria, as stipulated in section 269C of the Act. These criteria include determining if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. A TCO application is deemed to meet these core criteria if, among other things, the goods specified in the application are not the type prohibited by section 269SJ of the Act and the CEO is satisfied that the application fulfils the core criteria (section 269P(3)).
Upon satisfying the core criteria, the CEO is mandated to issue a written TCO. This order declares that the goods specified in the application are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995 (the Tariff). The TCO for the gas turbine water injection units (Instrument TCO No. 0946408) was issued on 3 April 2009, applying item 50 of the Tariff to these units. This resulted in the goods in question being exempt from customs duty, which otherwise would have been 5%. The TCO came into force on 7 January 2009, the day the application was lodged, as per subsection 269S(1) of the Act.
The Act imposes several obligations on the CEO, including publishing a notice in the Gazette inviting submissions from any person who might have reasons against the issuance of a TCO (subsection 269K(1) of the Act). In this case, the CEO did not receive any submissions opposing the TCO. Furthermore, the Act ensures that the TCO does not negatively affect the rights of any person (other than the Commonwealth) as of the registration date, nor does it impose any liabilities on any person for actions taken before the registration date (subsection 269S(1) of the Act). Importers of the affected goods can benefit from this TCO by applying for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
There are no specific offences, penalties, or consequences outlined in the provided text for breaching the provisions of the TCO. However, non-compliance with the Customs Act 1901 or related regulations could result in civil or criminal penalties, which are not detailed in this particular TCO document. The maximum penalties for breaches of the Customs Act can vary widely depending on the nature and severity of the offence, and could include fines and imprisonment.