EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946428
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 fuel delivery system on 07 January 2009.
Instrument
TCO No 0946428 was made on 03 April 2009. It declares that those certain fuel delivery 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. 0946428 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. 0946428, enacted in 2009, is an instrument made under the Customs Act 1901 to address the specific need of reducing customs duty on certain goods. The instrument was introduced to provide a concession on customs duty for certain fuel delivery systems, which were applied for by Origin Energy Power on 7 January 2009. The primary objective of this instrument, as stated in the explanatory statement, is to declare that the specified fuel delivery systems are subject to a lower rate of duty, effectively making it free of charge, provided that no substitutable goods were produced in Australia at the time of application. This was enacted by the Chief Executive Officer of Customs (CEO) who was satisfied that the application met the core criteria set out in the Customs Act 1901. The instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on imported goods from the date the TCO was taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0946428 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been sought and granted by the Chief Executive Officer of Customs. This instrument specifically pertains to certain fuel delivery systems for which Origin Energy Power applied and was granted a concession on 7 January 2009. The TCO applies to these goods by exempting them from the general rate of customs duty, which is 5%, and instead imposing a duty rate of free. The Act enables applications for TCOs from individuals or entities seeking a lower rate of customs duty for goods that meet specific criteria, namely that no substitutable goods are produced in Australia. The TCO's effect is to provide tariff concessions to these goods, and the instrument does not disadvantage any person or impose liabilities on anyone for actions taken before its registration. The rights of importers are beneficially affected, as they can apply for refunds of duty on goods imported since the TCO's effective date. The application of this Act is within the Commonwealth jurisdiction, extending its reach nationally across Australia.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269E, 269D, and 269P(3) of the Customs Act 1901. Section 269C states that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies the meanings of "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269E defines "ordinary course of business," while section 269D defines "goods produced in Australia." Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order (a TCO) declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations on the Chief Executive Officer of Customs (CEO) in handling Tariff Concession Orders. Upon receiving an application for a TCO, the CEO must first determine if the application pertains to goods specified in section 269SJ of the Act, which are ineligible for a TCO. If the CEO finds the application valid, they must then assess whether the core criteria outlined in section 269C are met, specifically verifying that no substitutable goods were produced in Australia in the ordinary course of business on the application date. If the CEO confirms the application meets the criteria, they are required to publish a notice in the Gazette inviting submissions from any interested parties and must make a written TCO if satisfied.
Any breaches of the requirements or obligations stipulated in the Customs Act 1901 may result in significant consequences. While the explanatory statement does not detail specific offences or penalties, the Act generally provides for both civil and criminal penalties for non-compliance. Civil penalties can include fines, while criminal penalties may involve imprisonment, depending on the severity and nature of the breach. The exact penalties would be determined based on the specific provisions of the Customs Act and any applicable regulations.
In this particular case, the TCO No. 0946428 for certain fuel delivery systems was made effective from 07 January 2009, the date the application was lodged. The TCO ensures that these goods are subject to a reduced duty rate of 0% as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any new liabilities on individuals or entities. Importers of these goods can apply for a refund of duty paid on imports made since the TCO came into effect.