EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119445
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.
Alstom Grid Australia Ltd applied for a TCO in respect of certain transformer assembly platforms on 17 June 2011.
Instrument
TCO No 1119445 was made on 05 September 2011. It declares that those certain transformer assembly platforms 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. 1119445 is taken to have come into force on 17 June 2011.
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. 1119445, enacted in 2011, is an instrument made under the Customs Act 1901 to address the need for tariff concessions on specific goods not produced in Australia. The instrument was introduced to provide a lower rate of customs duty on goods that are not substitutable with locally produced items. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) in respect of such goods, ensuring that they are not disadvantaged by higher import tariffs. The instrument was made following an application by Alstom Grid Australia Ltd for a TCO on certain transformer assembly platforms. The enacting body, the CEO, determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for the concession. This decision allows for a tariff reduction from the general 5% duty to a free rate for the specified goods, effective from the date the application was lodged, 17 June 2011. The process included a public consultation period with no objections received, affirming the appropriateness of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 1119445 under the Customs Act 1901 applies to Alstom Grid Australia Ltd's application for tariff concessions on specific transformer assembly platforms, which are deemed not to have substitutable goods produced in Australia. The instrument applies to the conduct and transactions involving these goods, granting them a concession from the general duty rate of 5% to a free rate. The application of this instrument is jurisdictional, extending under the purview of the Commonwealth, and is effective from the date the application was lodged, 17 June 2011. The CEO of Customs must ensure that the application does not pertain to goods that cannot be subject to a tariff concession as outlined in section 269SJ of the Act. Furthermore, the instrument does not affect any pre-existing rights of persons, except for potentially benefiting importers who can apply for duty refunds on goods imported since the date of the instrument's effective commencement. The CEO's decision to issue the tariff concession order was made without any submissions from other parties, indicating that the application met the core criteria as defined under sections 269C, 269D, 269E and 269SJ of the Act.
Key Provisions
The main operative sections of this legislation revolve around the establishment and application of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows individuals to apply for a TCO, which the Chief Executive Officer of Customs (CEO) may grant if certain criteria are met (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to the TCO (section 269P(3)). Section 269C requires that no substitutable goods are produced in Australia in the ordinary course of business for the goods in question. Definitions for these terms are provided in sections 269D, 269E, and 269B of the Act. In this instance, TCO No. 1119445, made on 5 September 2011, applies to certain transformer assembly platforms, granting them a tariff concession.
The obligations imposed by this Act on the parties it governs are primarily centred around the application and evaluation process for TCOs. The CEO must assess whether an application meets the core criteria as outlined in section 269C and, if so, must issue a written TCO as specified in section 269P(3). Furthermore, the CEO is required to publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to submit any reasons why the TCO should not be granted (subsection 269K(1)). In this case, no submissions were received in response to the published notice. Additionally, the TCO itself does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on such persons (subsection 269S(1)).
The Act also outlines the consequences of breaching the provisions related to TCOs. However, the Explanatory Statement does not specify any particular offences, penalties, or consequences for non-compliance with the TCO process or its terms. The primary focus is on the procedural correctness of the application and issuance of TCOs. It is essential that the CEO adheres to the statutory requirements when evaluating applications and issuing orders. Any failure to do so could potentially result in legal challenges or administrative reviews, although specific penalties for such breaches are not mentioned in the provided text. The Act ensures that the rights of importers are protected and that they may apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.