EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512081
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 0512081 was made on 5 December 2005. 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 10%. 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. 0512081 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. 0512081, enacted on 5 December 2005, addresses the need for tariff concessions under Part XVA of the Customs Act 1901. The Act was amended to allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to certain goods, provided specific core criteria are met. This legislation was introduced to facilitate the importation of goods that are not produced domestically, thereby supporting trade and potentially reducing costs for importers. The instrument was enacted by the Australian Parliament, aiming to streamline the process for obtaining tariff concessions and ensuring that no substitutable goods are produced in Australia for the specific items in question. Vestas Nacelles Australia Pty Ltd applied for this concession concerning Wind Turbine Powered Generator Parts, which saw their customs duty rate reduced from 10% to 0% upon the instrument's effective date of 8 September 2005.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may grant lower rates of customs duty on specified goods. A TCO can be applied for by any person, provided that the goods in question do not fall under the prohibitions set out in section 269SJ of the Act. If the application satisfies the core criteria outlined in section 269C, which requires the absence of substitutable goods produced in Australia on the date of application, the CEO must issue a written order. The TCO instrument applies nationwide, covering all relevant goods as specified in the Schedule 4 of the Customs Tariff Act 1995. For instance, TCO No. 0512081 applies to certain Wind Turbine Powered Generator Parts, reducing their duty rate from 10% to 0%. The TCOs do not affect pre-existing rights or liabilities of any party other than the Commonwealth, and the rights of importers are positively affected as they can apply for duty refunds for imports made since the TCO's effective date.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0512081, made under the Customs Act 1901 (section 269F), pertain to the application process and conditions for granting a Tariff Concession Order (TCO) (section 269C). Section 269C of the Act specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. This involves a complex definition where 'substitutable goods' are those produced in Australia and capable of being used in a manner corresponding to the goods in question (section 269D and 269E). Once the CEO is satisfied that these criteria are met, they must make a written order declaring that the specified goods are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
In this specific case, Vestas Nacelles Australia Pty Ltd applied for a TCO for certain Wind Turbine Powered Generator Parts on 8 September 2005. The CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0512081 on 5 December 2005. This order effectively declares that these parts are subject to a 0% duty rate, which contrasts with the general rate of 10% (section 269P(3)). This concession is beneficial for importers of these parts, as they can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The Act imposes several obligations on the parties involved. The CEO must publish a notice in the Gazette, inviting any person who considers the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received. Additionally, the CEO must ensure that the TCO does not disadvantage or impose liabilities on any person in respect of actions taken before the date of registration (subsection 269S(1)). The TCO in question does not affect the rights of any person adversely and imposes no liabilities on anyone.
Failure to comply with the provisions of the Customs Act 1901 can lead to civil or criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally carry severe penalties under Australian law. These can include fines and imprisonment, depending on the severity of the breach. The maximum penalties for customs offences can vary widely, but they often include substantial fines and significant imprisonment terms for serious violations.