EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137494
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.
Ironside Management Services Pty Ltd applied for a TCO in respect of certain thermophilic digester on 10 November 2011.
Instrument
TCO No 1137494 was made on 30 January 2012. It declares that those certain thermophilic digesters 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. 1137494 is taken to have come into force on 10 November 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the imposition of customs duties on imported goods. One of the mechanisms established under the Act is the Tariff Concession Order (TCO) scheme, introduced to address the gap in tariff relief for goods that are not produced in Australia and for which no suitable domestic alternatives exist. The 2012 Tariff Concession Instrument No. 1137494 is an example of this scheme in action, facilitating tariff concessions for certain thermophilic digesters, thereby reducing the duty rate from the general rate of 5% to zero for these specific goods. This measure was enacted to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the TCO's effective date of 10 November 2011, without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, as augmented by Tariff Concession Order No. 1137494, pertains to the application and implementation of tariff concessions for specific goods. This Act applies to individuals and entities that are involved in the importation of goods affected by the TCO, thereby granting them a lower rate of customs duty on specified goods. The geographic scope of the Act is national, as it is a Commonwealth legislation that applies across Australia. The Act allows for the application of tariff concessions to goods that are not produced in Australia and do not have substitutable goods produced domestically. The CEO of Customs evaluates applications against the core criteria established in the Act, including the absence of substitutable goods in Australia, before granting a tariff concession order. Exemptions or exclusions are provided under section 269SJ of the Act, which lists goods ineligible for tariff concessions. The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which outlines the specific tariff items applicable to the goods in question.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) allows an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the application is not for goods specified in section 269SJ of the Act, the CEO must determine whether the application meets the core criteria outlined in section 269C. If satisfied, the CEO must issue a written TCO. For instance, Ironside Management Services Pty Ltd applied for a TCO for certain thermophilic digesters on 11 November 2011, and TCO No. 1137494 was issued on 30 January 2012, declaring these digesters to be subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general 5%.
The obligations imposed by the Act on applicants and the CEO include the submission of a valid application under section 269F and the CEO's duty to assess the application against the core criteria in section 269C. If the application meets the criteria, the CEO must issue the TCO and publish a notice in the Gazette inviting submissions from any interested parties. In this instance, the CEO issued TCO No. 1137494 after no submissions opposing the order were received. The TCO's effective date is the day the application was lodged, as per subsection 269S(1) of the Act, meaning TCO No. 1137494 is effective from 10 November 2011.
Under the Act, there are no specific offences or penalties outlined for breaches of the TCO provisions. However, any misuse of the TCO or non-compliance with the terms of the concession could potentially lead to general legal consequences such as penalties for fraud, misrepresentation, or other breaches of customs regulations. The Act does not specify maximum penalties for these breaches but refers to the broader legal framework that applies to such offences.