EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0407230
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.
Basslink PtyLtd applied for a TCO in respect of certain switches on 15 July 2004.
Instrument
TCO No 0407230 was made on 6 January 2005. It declares that those certain switches 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 3%.
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. One submission objecting to the TCO application was received from ABB Australia Pty Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Schneider Electric and Gerard Industries Pty Ltd to lodge a written submission.
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. 0407230 is taken to have come into force on 15 July 2004.
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. 0407230, enacted in 2005, addresses the issue of providing tariff concessions for certain goods as part of the Customs Act 1901. This legislation was introduced to allow for a reduced rate of customs duty on specified goods through Tariff Concession Orders (TCOs), which are made by the Chief Executive Officer of Customs. This mechanism aims to support industries by lowering the duty on goods that do not have substitutable Australian-made alternatives, thus encouraging their importation and use. The policy objective, as outlined in the Act, is to ensure that the application of tariff concessions does not disadvantage existing rights or impose new liabilities on individuals or entities, other than the Commonwealth.
The instrument was enacted by the Parliament of Australia and became effective on the date the application was lodged, in this case, 15 July 2004. The process involves public consultation where interested parties can object to the concession, ensuring transparency and fairness. In this instance, Basslink Pty Ltd applied for the concession on certain switches, and following the evaluation by the CEO of Customs, the tariff rate was reduced from 5% to 3%. The rights of importers were safeguarded, and they are entitled to refunds for duties paid on imports since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0407230 under the Customs Act 1901 applies to the specific category of goods for which Basslink Pty Ltd has applied for tariff concessions, namely certain switches. The instrument is targeted at the import of these goods and is applicable to the industry involved in the production and importation of electrical switches. It operates within the national jurisdiction of Australia, under the overarching framework established by the Customs Act and the Customs Tariff Act 1995. The instrument provides for a lower rate of customs duty on the specified goods, contingent upon the application meeting the core criteria set out in section 269C of the Customs Act. Notably, the Act excludes goods specified in section 269SJ from being subject to a tariff concession order, thereby limiting the scope of the concessions. The application and implementation of this instrument may be further detailed or extended through subordinate instruments, as permitted by the primary legislation.
Key Provisions
The Tariff Concession Instrument No. 0407230 under the Customs Act 1901 operates by granting tariff concessions to specific goods, allowing for reduced customs duty rates. Section 269F of the Act facilitates the application process, whereby an applicant, such as Basslink Pty Ltd, can apply for a Tariff Concession Order (TCO) in respect of certain goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application is valid and the core criteria are met, as specified in section 269C, a TCO is issued. This order, such as TCO No. 0407230, declares that the specified goods are subject to a lower rate of customs duty, in this case, reducing the duty from 5% to 3% for certain switches.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application complies with the conditions outlined in the Act, specifically verifying that no substitutable goods were produced in Australia, as per section 269C. Additionally, the CEO is required to publish a notice in the Gazette, inviting objections to the TCO application, in accordance with subsection 269K(1). If deemed necessary, the CEO may also directly invite written submissions from interested parties, such as Schneider Electric and Gerard Industries Pty Ltd, as provided for in subsection 269M(1).
Failure to adhere to the requirements of the Customs Act 1901 can result in various consequences. While the explanatory statement does not explicitly outline the penalties for non-compliance, it is implied that breaches of the Act could lead to legal ramifications. Under Australian law, non-compliance with customs regulations can result in fines and other penalties, depending on the severity and intent of the breach. For example, knowingly making false statements or engaging in fraudulent activities could attract significant penalties, both civil and criminal, as stipulated under relevant sections of the Customs Act and associated regulations.