EXPLANATORY STATEMENT
Tariff Concession Instrument No.0500220
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.
Hitachi Limited applied for a TCO in respect of certain boiler anchor frames on 7 January 2005.
Instrument
TCO No 0500220 was made on 18 March 2005. It declares that those certain boiler anchor frames 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. 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. 0500220 is taken to have come into force on 7 January 2005.
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, established a framework for the application of customs duties. To address specific economic and trade policy needs, the Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow the Chief Executive Officer of Customs to reduce the duty rate on certain imported goods. This mechanism was introduced to provide relief to importers of specific goods by lowering their customs duty obligations, provided that no substitutable goods are produced in Australia. This arrangement aims to enhance trade efficiency and competitiveness for certain imported goods by making them more affordable. The Tariff Concession Instrument No. 0500220, enacted on 18 March 2005, is an example of such an order, reducing the duty on certain boiler anchor frames from 5% to 3%. The process includes a requirement for public consultation, although in this case, no objections were received. The order came into effect on 7 January 2005, the date the application was lodged, and it benefits importers by potentially allowing them to claim refunds on duties paid before the order's effective date.
Scope and Application
The Tariff Concession Instrument No. 0500220, issued under the Customs Act 1901, applies specifically to certain boiler anchor frames for which Hitachi Limited made an application. This instrument, which came into effect on 7 January 2005, is part of the broader scheme under Part XVA of the Customs Act, allowing the Chief Executive Officer of Customs to reduce customs duty on specific goods if certain criteria are met. The instrument provides a lower rate of duty, from 5% to 3%, for these goods, contingent upon the CEO's satisfaction that no substitutable goods were produced in Australia on the day the application was lodged. This concession does not affect any existing rights of individuals or entities other than the Commonwealth and does not impose any liabilities on persons for actions taken prior to the registration date. The rights of importers are beneficially affected, as they can apply for duty refunds on imports since the effective date of the instrument.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, detail the process and criteria for making Tariff Concession Orders (TCOs). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning particular goods. The CEO must then assess whether the application complies with the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia at the time of application. If the CEO is satisfied that the application meets these criteria and does not involve goods specified in section 269SJ, which are ineligible for a TCO, the CEO is obligated to issue a written order (section 269P(3)).
The obligations imposed by the Act on the parties involved are significant. The CEO has the responsibility to ensure that any TCO application adheres to the outlined criteria, including verifying that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any person who may oppose the TCO to submit their concerns (subsection 269K(1)). The CEO's decision to grant or refuse a TCO must be based on the information available at the time and must comply with the statutory requirements set out in the Act.
Failure to comply with the provisions of the Customs Act 1901 can result in various civil and criminal consequences. For instance, if an entity fails to adhere to the conditions specified in a TCO or misrepresents information in an application, they may face penalties. The maximum penalties for breaches of the Customs Act can include substantial fines and, in some cases, imprisonment. The specifics of penalties are detailed in the relevant sections of the Act and any subsidiary legislation, but the potential severity underscores the importance of compliance with the Act's requirements.