EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507359
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.
Barrick Australia Limited applied for a TCO in respect of certain gearless wrap around synchronous motors on 16 June 2005.
Instrument
TCO No 0507359 was made on 21 October 2005. It declares that those certain gearless wrap around synchronous motors 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 free.
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. 0507359 is taken to have come into force on 16 June 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 to facilitate the regulation of goods imported into Australia by providing a framework for the imposition and collection of customs duties. The Act was introduced to address the need for a systematic approach to managing international trade and ensuring the protection of domestic industries. The Tariff Concession Instrument No. 0507359, enacted in 2005, is an amendment to the Customs Act, allowing the Chief Executive Officer of Customs to grant tariff concessions on certain goods, thereby reducing the customs duty payable on them. This instrument was developed in response to applications from businesses seeking relief from customs duties on specific goods, provided certain conditions are met. The policy objective is to support Australian industries by reducing the cost of imported goods that have no local equivalent, thereby promoting competition and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0507359 under the Customs Act 1901 applies to individuals or entities seeking a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. Specifically, it pertains to the application made by Barrick Australia Limited for certain gearless wrap around synchronous motors, which are not produced in Australia and therefore qualify for a reduced customs duty rate. The Act allows for the application of a TCO if no substitutable goods are produced in Australia in the ordinary course of business. This instrument, therefore, grants relief to the applicant by applying a free rate of duty on the specified motors, which contrasts with the general rate of 5%. The geographical reach of this legislation is national, as it operates under the authority of the Commonwealth of Australia. The instrument does not impose any new liabilities and does not disadvantage any person except the Commonwealth. Furthermore, it does not affect any pre-existing rights or liabilities accrued before its effective date. The TCO mechanism is subject to the conditions outlined in the Customs Act 1901 and its subordinate instruments, which may extend or restrict the application of such concessions.
Key Provisions
The Tariff Concession Instrument No. 0507359 under the Customs Act 1901 (the Act) primarily concerns the provision of Tariff Concession Orders (TCOs) for specific goods. Section 269F of the Act allows for the application of a TCO by a person to the Chief Executive Officer of Customs (the CEO), provided the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. A TCO application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as outlined in sections 269C and 269P(3). If the CEO is satisfied that these criteria are met, they must issue a written order declaring that the goods in question are subject to a prescribed tariff item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities include ensuring that any TCO application complies with the core criteria specified in section 269C. The CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made, as per section 269K(1). In this instance, the CEO did not receive any submissions opposing the TCO for certain gearless wrap around synchronous motors. The TCO applies from the date the application was lodged, in this case, 16 June 2005, under section 269S(1). Importantly, the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person.
Breaches of the provisions outlined in the Customs Act 1901 may result in various civil or criminal consequences. While the specific penalties for breaches of TCO provisions are not detailed in the explanatory statement, the Act generally provides for substantial penalties for non-compliance with customs regulations. Typically, penalties can include fines and imprisonment, depending on the severity of the breach. The exact penalties would be determined in accordance with the applicable laws and regulations governing customs duties and tariff concessions.