EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1045490
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.
West Coast Response Pty Ltd applied for a TCO in respect of certain ocean oil spill containment systems on 08 October 2010.
Instrument
TCO No 1045490 was made on 07 January 2011. It declares that those certain ocean oil spill containment systems 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. 1045490 is taken to have come into force on 08 October 2010.
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 was enacted by the Australian Parliament to provide for the administration of customs and excise, including the collection of duty on imported goods. The Tariff Concession Instrument No. 1045490, issued in 2011, addresses a gap in the Act by providing a mechanism for tariff concessions on specific goods through Tariff Concession Orders (TCOs). This legislative instrument allows the Chief Executive Officer of Customs to grant a lower rate of customs duty on goods that meet the core criteria, specifically where no substitutable goods are produced in Australia in the ordinary course of business. In this instance, the Instrument applies to certain ocean oil spill containment systems, reducing the duty rate from 5% to free. The policy objective is to support industries that rely on imported goods by reducing the cost of importing specific items, thereby promoting economic efficiency and supporting the competitiveness of Australian industries.
Scope and Application
The Tariff Concession Instrument No. 1045490 under the Customs Act 1901 applies specifically to certain ocean oil spill containment systems, following an application by West Coast Response Pty Ltd. This legislation facilitates the reduction of customs duty for these goods to zero, provided no substitutable goods are produced in Australia in the ordinary course of business. The instrument's reach is national, operating within the framework set by the Customs Act and the Customs Tariff Act 1995, and its implementation is overseen by the Chief Executive Officer of Customs. The legislation does not disadvantage any existing rights or impose liabilities on persons other than the Commonwealth. It is noteworthy that the instrument extends its application to all relevant imports from the date the application was lodged, allowing importers to claim refunds for duties paid on such goods since that date. The process also includes a mandatory public consultation, although in this instance, no submissions were received.
Key Provisions
The Customs Act 1901 allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) as outlined in Part XVA. Section 269F empowers an individual or entity to apply for a TCO, provided that the goods in question are not excluded as per section 269SJ. The CEO assesses whether the application meets the core criteria under section 269C, specifically determining if no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. Definitions for these terms are provided in sections 269D, 269E, and 269F of the Act. If the CEO confirms that the core criteria are met, they must issue a written TCO, as stipulated in section 269P(3).
The obligations under the Act for the CEO include accepting valid TCO applications, evaluating them against the core criteria, and publishing a notice in the Gazette inviting submissions from interested parties, as per subsection 269K(1). The CEO must also ensure that the TCO does not adversely affect the rights of individuals or entities as of the date of registration, in line with subsection 269S(1). In the case of TCO No. 1045490, the CEO determined that ocean oil spill containment systems qualified for the concession and issued the order on 07 January 2011, specifying that these goods are subject to a free rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995. This TCO came into effect on 08 October 2010, the date the application was lodged.
There are no specific offences, penalties, or consequences mentioned in the Act for breaches related to TCOs. However, the Act ensures that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on them for actions taken before the TCO's effective date. Importers of the affected goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations, benefiting from the TCO's provisions. The Act thus ensures that the TCO operates within a framework that protects the rights of all parties involved while providing the intended tariff concessions.