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REMOVAL OF 3% REVENUE DUTY ON TCOs AND IMPACT ON EPBS - COMMENTARY BY LOUIS GROSS

In the 2005 Budget, the Government announced that the 3% duty payable by holders of tariff concession orders will be removed. This will make TCOs more attractive but there is still a place for the usage of the Enhanced Project By-Law Scheme.

Consequent upon the removal of the 3% duty on tariff concession orders, importers should give careful consideration to assessing whether their goods can qualify for a TCO. The process of application can be relative straight forward but is often dependent upon whether there are substitutable goods manufactured in Australia in the ordinary course of business. These are terms that are defined in the Customs Act and we can provide advice on their interpretation.

The EPBS uses a different concept of ‘equivalent goods' rather than substitutable goods. Equivalent goods is a much more narrow term and, accordingly, it is easier to distinguish from potential Australian manufacturers, e.g. the imported goods may be more technologically advanced, more efficient or more productive than goods produced in Australia. Such goods would be unlikely to qualify for a TCO but may qualify under the EPBS.

In addition, if the imported goods are unlikely to arrive in one shipment, then they will not be able to be covered by a single TCO and, if there are multiple shipments then, clearly, an EPBS application would be more appropriate.

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