EXPLANATORY STATEMENT
Tariff Concession Instrument No.0500319
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 pulveriser parts on 10 January 2005.
Instrument
TCO No 0500319 was made on 18 March 2005. It declares that those certain boiler pulveriser parts 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. 0500319 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, enacted by the Parliament of Australia, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The primary aim of this legislation is to facilitate reduced customs duty rates for specific goods, provided they meet the criteria set out in the Act, thereby addressing economic and trade efficiency issues by lowering the cost of importing certain goods. This approach aims to support industries by reducing their input costs, which can enhance competitiveness both domestically and internationally. In line with this objective, the explanatory statement for Tariff Concession Instrument No. 0500319, issued on 18 March 2005, demonstrates the application of the Act's provisions to provide a concessional duty rate for certain boiler pulveriser parts, reflecting the policy objective of facilitating smoother and more cost-effective trade practices.
Scope and Application
The Tariff Concession Instrument No. 0500319 applies to specific goods, namely certain boiler pulveriser parts, as determined by the Chief Executive Officer of Customs (CEO) under Part XVA of the Customs Act 1901. This legislation is applicable to entities or individuals seeking tariff concessions on these goods, specifically when no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia and its customs regulations. The instrument does not apply to goods specified in section 269SJ of the Customs Act, which lists those that cannot be subject to a tariff concession order (TCO). Furthermore, the application process is transparent and includes an opportunity for public submission, although in this instance, no submissions were received. The TCO itself does not disadvantage any person by affecting their rights as at the date of registration and does not impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0500319 (TCO No. 0500319) pertain to the application, assessment, and implementation of tariff concession orders under the Customs Act 1901 (the Act). Section 269F (1) enables an application to be made to the Chief Executive Officer of Customs (the CEO) for a tariff concession order (TCO) in respect of goods. Section 269C specifies that the CEO must assess whether the application meets the core criteria, which is fulfilled if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). If the CEO determines that the application meets these criteria, they are required to make a written order (a TCO) that specifies the goods subject to the concession and the applicable rate of duty (section 269P(3)).
Under the Act, the CEO has specific obligations when handling TCO applications. These include accepting a valid application and publishing a notice in the Gazette as soon as practicable, inviting any interested parties to lodge submissions (subsection 269K(1)). The CEO is also responsible for determining whether the application meets the core criteria (section 269C) and, if satisfied, making a written order that specifies the concession (section 269P(3)). Additionally, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted before the registration date (subsection 269S(1)).
The Act outlines potential consequences for breaches of its provisions. While the explanatory statement does not explicitly detail offences or penalties, it is implied that failure to comply with the Act's requirements, such as improper application of a TCO or non-compliance with the CEO's obligations, could lead to legal action. The maximum penalties for breaches of customs legislation, as set out in the Customs Act 1901, generally include fines and imprisonment. For instance, section 235A of the Act provides for penalties up to $11,100 or imprisonment for up to two years for certain breaches, while more serious offences can result in penalties of up to $166,500 or imprisonment for up to ten years (section 236). The specific penalties would depend on the nature and severity of the breach.