EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946613
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.
Downer EDI applied for a TCO in respect of certain asphalt mixing plant on 08 January 2009.
Instrument
TCO No 0946613 was made on 03 April 2009. It declares that those certain asphalt mixing 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. 0946613 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the imposition of customs duties and the regulation of imports and exports. To address the need for flexibility in tariff application, the Act includes provisions for Tariff Concession Orders (TCOs), which can reduce or eliminate customs duty on certain goods. The problem this legislative tool aims to address is the potential for disproportionate tariff burdens on imported goods where no suitable Australian-made alternatives exist. The explanatory statement for Tariff Concession Instrument No. 0946613 clarifies the process by which the Chief Executive Officer of Customs can grant these concessions, ensuring that they align with the policy objective of promoting fair trade practices and supporting Australian industries where appropriate.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0946613, applies to any person or entity seeking a tariff concession on specified goods imported into Australia. This Act facilitates the application process for Tariff Concession Orders (TCOs) under section 269F, whereby the Chief Executive Officer of Customs (CEO) may grant a TCO if certain conditions are met, specifically that no substitutable goods are produced in Australia in the ordinary course of business. This instrument applies to the customs duty regime nationwide, impacting importers of the specified goods by potentially reducing their duty liabilities. The instrument does not apply to goods listed in section 269SJ, which are ineligible for tariff concessions. The instrument also ensures that no pre-existing rights or liabilities of persons other than the Commonwealth are adversely affected by its provisions.
The scope of this legislation is extended through the subordinate Customs (Tariff Concession Orders) Regulations 1999, which provide further detail on the application and processing of TCOs. This includes the ability for importers to apply for duty refunds on goods imported since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations. The instrument itself, TCO No. 0946613, specifically concerns certain asphalt mixing plant, reducing their customs duty rate from 5% to free under item 50 of Schedule 4 to the Tariff. The instrument's application is national, applying uniformly across all states and territories of Australia.
Key Provisions
The main operative sections of this legislation pertain to the establishment and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). Specifically, section 269C outlines the core criteria that must be met for a TCO application to be considered valid. According to this section, an application will meet the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D). Section 269P(3) then mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, a written TCO must be issued. For the specific case of TCO No. 0946613, the CEO determined that certain asphalt mixing plant were eligible for a TCO, resulting in a duty-free status for these goods.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must submit an application to the CEO, which must include details satisfying the core criteria as stipulated in section 269C. The CEO is then obligated to review the application and determine whether it meets these criteria. If satisfied, the CEO must issue a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted (subsection 269K(1)). In this instance, no objections were received, and the TCO was issued accordingly.
The legislation also outlines potential consequences for non-compliance or improper application of the TCO scheme. While the explanatory statement does not detail specific offences or penalties, the general legal framework of the Customs Act 1901 may impose civil or criminal penalties for breaches related to customs duties and regulations. Typically, these penalties can include fines or imprisonment, depending on the severity of the offence. In the context of TCOs, failure to comply with the terms or attempting to fraudulently obtain a concession could lead to such penalties. However, the explanatory statement does not specify the exact penalties for breaches related to TCOs.
The TCO No. 0946613, once issued, benefits importers of the specified asphalt mixing plant by allowing them to claim refunds on duty paid before the TCO's effective date, as per the Customs (Tariff) Regulations 1996. This benefit does not extend to pre-existing rights or impose new liabilities on any person, except for the Commonwealth, ensuring that no party is disadvantaged or unfairly burdened by the TCO.