EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511961
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.
Vestas Nacelles Australia Pty Ltd applied for a TCO in respect of certain Wind Turbine Powered Generator Parts on 8 September 2005.
Instrument
TCO No 0511961 was made on 9 January 2006. It declares that those certain Wind Turbine Powered Generator 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 0%.
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. 0511961 is taken to have come into force on 8 September 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. 0511961 was enacted in 2006 under the Customs Act 1901. This instrument aims to address the specific issue of providing tariff concessions on certain Wind Turbine Powered Generator Parts. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the customs duty on goods, provided certain criteria are met. Vestas Nacelles Australia Pty Ltd applied for this concession, and the instrument was subsequently issued on 9 January 2006. The policy objective here is to facilitate the importation of these goods by reducing the customs duty from the general rate of 5% to 0%, thereby supporting the local production and use of renewable energy technology. The instrument was introduced without any objections from the public, as no submissions were received in response to the invitation for comments published by the CEO.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is applicable, subject to the conditions outlined in the Act. An applicant can request a TCO under section 269F, provided that the goods in question are not specified in section 269SJ as those that cannot be subject to a TCO. For a TCO to be granted, the CEO must be satisfied that the application meets the core criteria, primarily that no substitutable goods were produced in Australia at the time the application was lodged, as per section 269C. This requirement is further defined by sections 269D, 269E, and 269F, which explain the meanings of "goods produced in Australia," "ordinary course of business," and "substitutable goods," respectively. If these criteria are met, the CEO is obligated to issue a written order, as stated in section 269P(3). This process was applied in the case of Vestas Nacelles Australia Pty Ltd, which sought a TCO for certain Wind Turbine Powered Generator Parts, leading to TCO No. 0511961 being issued on 9 January 2006, reducing the duty rate from 5% to 0%. This order took effect on 8 September 2005, the date the application was lodged, and benefits importers by allowing them to apply for a refund of duties paid on these goods since that date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0511961 are found in the Customs Act 1901 (the Act) and the Customs Tariff Act 1995 (the Tariff). Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the application meets the core criteria, as specified in section 269C of the Act, the CEO must make a written order declaring the goods eligible for a concession. In this particular case, the TCO No. 0511961 declares that certain Wind Turbine Powered Generator Parts are subject to a lower rate of customs duty, specifically item 50 of Schedule 4 to the Tariff, which sets the rate at 0%.
The Act imposes several obligations on the parties involved. Firstly, section 269C requires the CEO to assess whether the application for a TCO meets the core criteria, which includes determining whether no substitutable goods were produced in Australia on the day the application was lodged. This is further defined by sections 269B and 269D of the Act. If the CEO is satisfied that the application meets these criteria, subsection 269P(3) mandates the CEO to make a TCO. Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this case, no submissions were received.
The Act also outlines potential consequences for non-compliance or breach. However, in the context of this specific TCO, no civil or criminal penalties are directly stated in the explanatory statement. The primary focus is on the administrative process and the conditions under which a TCO can be granted. The TCO itself does not impose any liabilities on any person, and it does not affect the rights of any person as at the date of registration, except to beneficially affect the rights of importers who may apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
In summary, the Tariff Concession Instrument No. 0511961 provides a streamlined process for applying for and obtaining a TCO, with a specific focus on ensuring that the application meets the core criteria as defined by the Customs Act 1901. The obligations of the CEO include assessing applications, making TCOs where appropriate, and publishing notices in the Gazette. While the Act does not detail specific penalties for breach in this context, it ensures that the rights of persons are not adversely affected and provides a mechanism for duty refunds for eligible importers.