EXPLANATORY STATEMENT
Tariff Concession Instrument No.0500221
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 Ltd applied for a TCO in respect of certain boiler pulverisers on 10 January 2005.
Instrument
TCO No 0500221 was made on 18 March 2005. It declares that those certain boiler pulverisers 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. 0500221 is taken to have come into force on 10 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 was enacted by the Australian Parliament and establishes a framework for the regulation of customs and excise, including the imposition of duties on imported goods. One of the mechanisms within the Act is the Tariff Concession Order (TCO) scheme, which allows for the reduction of customs duty on specific goods under certain conditions. The problem this scheme addresses is the potential economic disadvantage faced by importers who cannot source substitute goods domestically, thus making imported goods more competitive. The explanatory statement for Tariff Concession Instrument No. 0500221, made in 2005, highlights the process whereby Hitachi Ltd successfully applied for a TCO for certain boiler pulverisers, resulting in a reduced duty rate from 5% to 3%. This reduction was made possible by the Chief Executive Officer of Customs determining that no substitutable goods were produced in Australia at the time of the application, in accordance with the core criteria set out in section 269C of the Act. The policy objective is to facilitate trade by lowering the duty on goods that cannot be adequately replaced by domestic production, thereby benefiting importers and potentially stimulating economic activity.
Scope and Application
The Customs Act 1901, specifically through its Tariff Concession Orders (TCO) scheme, applies to any person or entity that wishes to import goods that are eligible for a lower rate of customs duty than the standard rate. The Act facilitates this by allowing the Chief Executive Officer of Customs to grant a TCO if certain criteria are met, such as the absence of substitutable goods produced in Australia. This scheme is available nationally across Australia, encompassing all states and territories under the Commonwealth jurisdiction. However, it explicitly excludes certain goods as defined in section 269SJ of the Act. The application process involves an assessment by the CEO to determine if the core criteria are met, followed by a potential publication in the Gazette to invite submissions from interested parties, although no such submissions were received in this instance. The commencement of a TCO is retroactive to the date the application was lodged, thereby ensuring that the rights of importers are positively affected from the date of application. The issuance of TCO No. 0500221 for certain boiler pulverisers is an example of this process, where the duty rate was reduced from 5% to 3%, effective from 10 January 2005, the date the application was made. The Act also ensures that the concession does not disadvantage any person by affecting their rights as they stood before the TCO was registered.
Key Provisions
The main operative sections of the Customs Act 1901 as applied in Tariff Concession Instrument No. 0500221 (sections 269C, 269P, and 269S) involve the process for making a Tariff Concession Order (TCO). Under section 269C, the Chief Executive Officer of Customs (CEO) must determine whether an application for a TCO meets the core criteria. This requires the CEO to be satisfied that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a TCO as per section 269P(3). This written order declares that the goods in question are subject to a lower rate of customs duty specified in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO is required to assess whether an application meets the core criteria, which involves confirming that no substitutable goods were produced in Australia. Once the CEO is satisfied, they must make a written TCO and declare the applicable lower duty rate. Hitachi Ltd, as the applicant, must ensure their application for a TCO is complete and meets the specified criteria. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. This notice serves to ensure transparency and allows interested parties to voice their opinions.
The Act also outlines consequences for non-compliance with its provisions. While the explanatory statement does not specify criminal offences or penalties, it is implied that failure to comply with the requirements for making a TCO, or submitting false information, could lead to legal repercussions. Typically, such breaches might result in fines or other penalties as prescribed by the Act or related legislation. The specifics of penalties, however, are not detailed in the provided text.
In summary, Tariff Concession Instrument No. 0500221 under the Customs Act 1901 facilitates the application and assessment process for tariff concessions on certain goods. The CEO is responsible for ensuring applications meet the core criteria and that the appropriate TCO is issued. Hitachi Ltd, as the applicant, must ensure their application is valid. The rights of importers are protected, and they may apply for duty refunds on goods imported since the TCO came into force. Failure to comply with the Act's provisions could lead to legal consequences, although the exact penalties are not specified in the provided text.