EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501941
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 structural steel boiler parts on 16 February 2005.
Instrument
TCO No 0501941 was made on 6 May 2005. It declares that those certain structural steel boiler 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. 0501941 is taken to have come into force on 16 February 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 Tariff Concession Instrument No. 0501941, enacted in 2005, addresses the need for specific tariff concessions for certain imported goods, in line with the provisions of the Customs Act 1901. This Act enables the Chief Executive Officer of Customs to reduce customs duty rates on particular goods, provided they meet the core criteria outlined in the legislation. The policy objective is to facilitate the import of goods that are not produced domestically, thereby promoting competition and economic efficiency. Hitachi Limited's application for a tariff concession on structural steel boiler parts exemplifies this process, resulting in a lower duty rate from 5% to 3%, effective from the date of application. The instrument was published in the Gazette, inviting public submissions, though none were received. The concession does not retroactively affect existing rights or impose new liabilities, and benefits importers by allowing duty refunds for qualifying goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0501941, made under the Customs Act 1901, applies to Hitachi Limited in relation to certain structural steel boiler parts for which they sought tariff concessions. This Act is a Commonwealth statute and thus has jurisdiction over the entire nation. The instrument provides for a lower rate of customs duty on the specified goods as a concession, reducing the general duty rate of 5% to 3% for these parts. The application of the TCO is contingent upon the core criteria being met, specifically that no substitutable goods were produced in Australia on the date the application was lodged. The instrument was published in the Gazette, inviting public submissions but did not receive any. The concession became effective on the date of application, 16 February 2005, and benefits importers by allowing them to apply for a refund of the duty paid on these goods since that date. The Act ensures that the rights of non-Commonwealth persons are not adversely affected by this concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0501941 under the Customs Act 1901 pertain to the granting of tariff concession orders (TCOs) for specific goods, in this case, certain structural steel boiler parts. Section 269C outlines the core criteria that a TCO application must meet, which is that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the Chief Executive Officer of Customs (CEO) must make a written TCO order, as stipulated in section 269P(3). This particular TCO, No. 0501941, was made on 6 May 2005 and declares that the specified structural steel boiler parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, thereby applying a reduced duty rate of 3% instead of the general rate of 5%.
The obligations imposed by the Act on the parties involved primarily concern the application process and the conditions under which the TCO can be granted. Under section 269F, a person can apply to the CEO for a TCO if the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess the application against the core criteria in section 269C. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who might have reasons why the TCO should not be made. The CEO’s decision must be made without any received submissions adversely affecting the rights of any person other than the Commonwealth.
Regarding consequences for breaches, the Act does not explicitly state offences or penalties for failing to comply with the TCO provisions. However, any person adversely affected by the TCO could potentially challenge the decision through the administrative appeals process under the Administrative Appeals Tribunal Act 1975, or seek judicial review in the Federal Court of Australia. Additionally, if the goods subject to the TCO are imported in breach of any other customs regulations, the importer could face penalties under the Customs Act 1901, which include fines and imprisonment for serious breaches. The specific penalties would depend on the nature and severity of the offence as determined by the court.