EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509807
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 steam generation boiler auxiliary plants on 25 July 2005.
Instrument
TCO No 0509807 was made on 21 October 2005. It declares that those certain steam generation boiler auxiliary plants 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. 0509807 is taken to have come into force on 25 July 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. 0509807 was enacted in 2005 as a measure under the Customs Act 1901. This instrument addresses the need to provide tariff concessions for specific imported goods, which was identified as a gap in the existing customs duty framework. The instrument allows the Chief Executive Officer of Customs to grant tariff concessions on goods, effectively reducing or eliminating customs duties for these items if certain criteria are met. This was enacted by the Parliament of Australia, with the primary policy objective of facilitating the importation of goods that are not produced domestically, thereby supporting trade and economic efficiency. Hitachi Limited's application for a tariff concession on certain steam generation boiler auxiliary plants exemplifies the application of this instrument, where the duty rate was reduced from 5% to free, reflecting the non-substitution of these goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0509807 under the Customs Act 1901 applies to goods specified in the application, which in this case are certain steam generation boiler auxiliary plants. It is applicable to the applicant, Hitachi Limited, and potentially to any other entity that imports these specific goods, thereby facilitating tariff concessions. The scope of this legislation is national, given its foundation under the Commonwealth Customs Act 1901, and it extends to all states and territories within Australia. It is noteworthy that the instrument does not disadvantage any person by affecting their rights as of the registration date or impose liabilities for actions taken prior to the registration. The process involves an application to the Chief Executive Officer of Customs, who must ensure that the goods in question are not substitutable by any produced in Australia and meet the core criteria for tariff concessions. There were no submissions opposing the application, indicating a lack of contention over the eligibility of the goods for the tariff concession. The TCO was effective from the date the application was lodged, 25 July 2005, and importers of these goods can apply for a refund of duty under the relevant regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0509807 under the Customs Act 1901 (section 269C) require the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) if satisfied that the application meets the core criteria, which include the absence of substitutable goods produced in Australia. If these conditions are met, the CEO must issue a written order (section 269P(3)), as was done for Hitachi Limited's application regarding steam generation boiler auxiliary plants on 25 July 2005. The TCO declares that these specific goods are subject to a zero rate of customs duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, replacing the general 5% duty rate.
The Act imposes several obligations on the parties involved. Firstly, any person may apply for a TCO (section 269F), provided the goods do not fall under the prohibitions listed in section 269SJ. The CEO must then determine if the application meets the core criteria, particularly ensuring no substitutable goods are produced in Australia at the time of application (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)), although no submissions were received for this particular TCO. Once a TCO is made, it comes into effect on the day the application was lodged (subsection 269S(1)).
The legislation does not explicitly outline specific offences or penalties for breaches of the TCO provisions. However, breaches of other provisions within the Customs Act 1901 could lead to various civil and criminal penalties. For instance, knowingly making a false statement in an application could result in fines or imprisonment, depending on the severity and intent of the breach. The maximum penalties for such offences are detailed in other sections of the Customs Act and related regulations, but they are not specified within the scope of this particular TCO.