EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511113
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 returners on 22 August 2005.
Instrument
TCO No 0511113 was made on 04 November 2005. It declares that those certain pallet returners 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. 0511113 is taken to have come into force on 22 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, was amended to introduce the scheme for Tariff Concession Orders (TCOs) under Part XVA. This scheme was established to provide a mechanism whereby the Chief Executive Officer of Customs could grant tariff concessions on certain imported goods, thereby reducing the customs duty payable on those goods. The objective of this initiative was to facilitate trade by making specific imported goods more affordable, which in turn supports economic growth and competitiveness. Siemens Ltd's application for a TCO concerning certain pallet returners was processed under this scheme, with the order coming into effect on the date of the application, 22 August 2005. The Tariff Concession Order No. 0511113 was made on 4 November 2005, following a determination that no substitutable goods were produced in Australia, thus meeting the core criteria for tariff concessions.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking tariff concession orders for goods imported into Australia, with the application process managed by the Chief Executive Officer of Customs. The Act permits the CEO to grant a Tariff Concession Order (TCO) to apply a lower rate of customs duty on goods not produced in Australia, provided the application meets specified criteria, such as the absence of substitutable goods produced domestically. This legislation impacts importers by potentially reducing their duty liabilities on certain imported goods, which can be retroactively claimed for refunds. The TCO does not disadvantage any person or impose new liabilities on anyone, and its application is national in scope. The Act also includes provisions for public consultation on TCO applications, although no submissions were received for TCO No. 0511113. The TCO's application extends through subordinate instruments, allowing for further clarification and amendment as necessary.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269E, and 269P of the Customs Act 1901. Section 269C outlines the core criteria for approving a Tariff Concession Order (TCO) application, stating that no substitutable goods should be produced in Australia at the time the application is lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269E further elaborates on what constitutes the "ordinary course of business," while Section 269P stipulates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written TCO order. This order specifies that the goods in question will be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a particular rate of duty, which in this case is free.
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily centred around the application and approval process for TCOs. An applicant, such as Siemens Ltd in this instance, must ensure their application for a TCO complies with the core criteria outlined in Section 269C. The CEO of Customs has the duty to review the application and verify that no substitutable goods are produced in Australia on the date the application is lodged. If the CEO is satisfied, they must make a written TCO order as per Section 269P. Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO, as per Section 269K(1). In the case of TCO No. 0511113, no such submissions were received.
The legislation includes potential consequences for breaches of the terms outlined within it, although the specific penalties are not detailed in the text provided. Generally, failure to comply with the requirements for TCO applications, or any misrepresentation in the application process, could potentially lead to civil or criminal penalties. These penalties could include fines, imprisonment, or other legal repercussions, depending on the severity and intent of the breach. However, the exact nature of these penalties would typically be determined by the relevant courts and the specifics of each case, as they are not explicitly stated in the text. The Act ensures that the rights of individuals or entities other than the Commonwealth are protected, and any liabilities arising from actions taken before the TCO's effective date are not imposed.