EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0408913
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 Pty Ltd applied for a TCO in respect of certain instrument transformers on 31 August 2004.
Instrument
TCO No 0408913 was made on 12 January 2005. It declares that certain instrument transformers 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. Two submissions were received from Australian manufacturers ABB Australia Pty Ltd and Circle-C Electrical Industries.
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 Wilson Transformer Co Pty Ltd, Brodribb M Pty Ltd, Thycon Industrial Pty Ltd, Ampcontrol Pty Ltd and Cadwallader Engineering 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. 0408913 is taken to have come into force on 31 August 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 Customs Act 1901, enacted by the Parliament of Australia, was amended to include a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The problem this scheme addresses is the need to provide tariff concessions for certain goods, thereby facilitating trade and potentially reducing costs for importers. The Tariff Concession Instrument No. 0408913, enacted in 2005, provides a concrete example of this scheme in action. In this instance, Basslink Pty Ltd applied for a TCO for certain instrument transformers, which was granted as no substitutable goods were produced in Australia. This resulted in a reduction of the duty rate from 5% to 3%. The process involved consultation with various stakeholders, including submissions from Australian manufacturers, and the tariff concession was made effective from the date of the application, ensuring no retroactive disadvantages to parties involved.
Scope and Application
The Tariff Concession Order No. 0408913, made under section 269F of the Customs Act 1901, applies to certain instrument transformers and the entities involved in their importation, such as Basslink Pty Ltd. This order, which was published in the Gazette on 31 August 2004, is applicable to the goods specified in the application, which in this case are instrument transformers. The primary purpose of the TCO is to provide a lower rate of customs duty on these goods, reducing the general duty rate from 5% to 3%. The order is effective from the date the application was lodged and does not affect any rights or impose any liabilities on persons other than the Commonwealth in respect of actions taken before the registration date.
The Act applies to any person or entity that imports the specified goods and seeks to benefit from the lower duty rate. The geographic reach of the Act is national, applying across Australia, as it is an instrument made under the Commonwealth Customs Act 1901. The TCO excludes goods specified in section 269SJ of the Act, which are those that cannot be subject to a TCO. The application process for a TCO involves submitting an application to the Chief Executive Officer of Customs, who must be satisfied that no substitutable goods are produced in Australia in the ordinary course of business. This application process may be extended or restricted through subordinate instruments, such as regulations or notices, as outlined in the Customs Regulations 1995.
Key Provisions
The Tariff Concession Instrument No. 0408913 under the Customs Act 1901 provides for the application of lower customs duty rates on certain goods, in this case, instrument transformers, as specified by the Chief Executive Officer of Customs (CEO) (section 269F). The Act outlines the process for applying for a Tariff Concession Order (TCO), which includes meeting core criteria such as the absence of substitutable goods produced in Australia (section 269C). The CEO is mandated to make a written order if these criteria are met (subsection 269P(3)), and the application must be published in the Gazette with an invitation for submissions from interested parties (subsection 269K(1)). In this case, the CEO also invited specific parties to submit written submissions regarding the TCO (subsection 269M(1)).
The obligations imposed by the Act require applicants to ensure their goods meet the eligibility criteria for a TCO, which includes the absence of substitutable goods produced in Australia (section 269C). The CEO is obligated to review applications against these criteria, consult with relevant parties, and make a decision based on the evidence provided. Furthermore, the CEO must publish the application and invite submissions from the public, ensuring transparency and allowing for stakeholder engagement in the decision-making process (subsection 269K(1)). The CEO is also empowered to invite specific submissions from identified stakeholders if deemed necessary (subsection 269M(1)).
The Act outlines consequences for non-compliance with the provisions of a TCO. Although the explanatory statement does not specify detailed penalties, breaches of the Customs Act 1901, including the misuse or improper application of a TCO, may result in civil or criminal penalties. Under the Customs Act, penalties for offences can include fines and imprisonment, with the severity of the penalty depending on the nature and extent of the breach. It is also important to note that any misrepresentation or fraud in the application process could lead to additional criminal charges under other sections of the Act or related legislation.