EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510587
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.
Siemens Ltd applied for a TCO in respect of certain pallet racking plant on 11 August 2005.
Instrument
TCO No 0510587 was made on 04 November 2005. It declares that the pallet racking is an item 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. 0510587 is taken to have come into force on 11 August 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 Australian Parliament, establishes a framework for the imposition and administration of customs duties on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) under section 269F, which provide a lower rate of customs duty for specified goods. The Tariff Concession Instrument No. 0510587 was introduced to provide tariff concessions for certain pallet racking plant imported by Siemens Ltd. The objective of this instrument is to ensure that these goods are subject to a reduced duty rate of zero, provided that no substitutable goods are produced in Australia. This instrument was created following an application by Siemens Ltd on 11 August 2005, and it came into effect on the same date. The Chief Executive Officer of Customs assessed the application and determined that it met the core criteria set out in section 269C of the Act, leading to the issuance of the TCO on 4 November 2005. The process involved public consultation, with no submissions received against the concession. The TCO benefits importers by allowing them to claim a refund of duty on imports made since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0510587 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO) sought by an applicant, such as Siemens Ltd in this instance. The Act allows for the Chief Executive Officer of Customs to reduce the rate of customs duty on certain goods if specific core criteria are met, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the TCO application was lodged. This instrument has national reach within the Commonwealth of Australia and applies to any entity or individual importing the specified goods. The instrument does not specify any exclusions or exemptions beyond those outlined in section 269SJ of the Act, which precludes certain goods from being subject to a TCO. The application of the TCO is governed by subordinate instruments and regulations, including the Customs Tariff Act 1995 and the Customs Regulations 1999, which provide detailed definitions and criteria for the assessment of substitutable goods and ordinary course of business. The TCO's commencement date aligns with the date the application was lodged, ensuring that any imported goods subject to the TCO from that date onwards benefit from the reduced duty rate.
Key Provisions
The Tariff Concession Instrument No. 0510587, which relates to the Customs Act 1901, establishes a mechanism through which tariff concession orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to reduce customs duty on certain goods. Section 269F of the Act allows for applications to be made by any person seeking a TCO for specific goods. If the application does not pertain to goods excluded by section 269SJ and meets the core criteria outlined in section 269C, the CEO is obligated to make a TCO. Section 269C stipulates that the core criteria are met if, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the CEO include reviewing the application to ensure it complies with the statutory criteria and making a decision based on whether the core criteria are satisfied. Additionally, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may object to the making of the TCO, as required by section 269K(1). The Act also stipulates that a TCO is deemed to come into force on the day the application was lodged, as per section 269S(1). This ensures that the tariff concession applies retroactively from the application date, thereby protecting the rights of importers who can seek duty refunds for goods imported since the effective date of the TCO.
Under this legislation, any breaches or non-compliance with the provisions could lead to civil or criminal consequences. Although the explanatory statement does not explicitly detail specific penalties, it is known that breaches of the Customs Act 1901 can result in significant penalties. For instance, under section 255 of the Act, any person who contravenes certain provisions can be subject to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. This underscores the importance of adhering to the legislative requirements and the potential severity of consequences for non-compliance.