EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512618
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.
Nova Smic applied for a TCO in respect of certain Generators on 22 September 2005.
Instrument
TCO No 0512618 was made on 16 December 2005. It declares that those certain Generators 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. 0512618 is taken to have come into force on 22 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. 0512618 was enacted in 2005 under the Customs Act 1901, to provide a lower rate of customs duty on certain goods. This was introduced to address the problem of high customs duties on specific imported goods that were not produced domestically and had no substitutable alternatives, which could potentially stifle their import and use in Australia. The instrument was made by the Chief Executive Officer of Customs, in accordance with the provisions of Part XVA of the Customs Act 1901, which allows for the making of Tariff Concession Orders. The policy objective is to facilitate the importation of goods that are not produced in Australia and do not have substitutable alternatives, by reducing the customs duty on these goods, thus potentially lowering the cost for businesses and consumers.
Following the application by Nova Smic for a Tariff Concession Order for certain generators, the CEO determined that no substitutable goods were produced in Australia, and the application met the core criteria. As a result, Instrument TCO No. 0512618 was made on 16 December 2005, declaring that the certain generators are goods to which item 50 of Schedule 4 to the Tariff applies, with a reduced rate of duty from 5% to 0%. The TCO was published in the Gazette, inviting submissions from any interested parties, however, none were received. The TCO came into force on 22 September 2005, the day the application was lodged, and it does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) for specific goods, enabling a reduction in customs duty. These concessions apply to goods identified in the application, provided that no substitutable goods are being produced in Australia in the ordinary course of business on the date the application is lodged. The application process involves an assessment by the Chief Executive Officer of Customs, who must publish a notice in the Gazette inviting submissions from interested parties. The legislative framework allows for the concession to be effective from the date of the application, ensuring that the rights of importers are preserved and that no one is disadvantaged by the concession. TCO No. 0512618, for example, concerns certain generators and sets the duty rate to zero, a reduction from the general rate of 5%. This concession does not impose any liabilities on persons other than the Commonwealth and allows for duty refunds for importers of the specified goods from the date the concession took effect. The scope of this legislation is thus focused on facilitating the importation of specific goods by reducing applicable customs duties under defined conditions.
Key Provisions
The Tariff Concession Instrument No. 0512618, which is grounded in the Customs Act 1901, concerns the application of lower customs duty rates to specific goods through Tariff Concession Orders (TCOs) as outlined in sections 269F, 269C, and 269B. Under section 269F, any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question are not prohibited by section 269SJ. The CEO must then assess whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia at the time of the application (section 269C). The definition of key terms such as "substitutable goods," "goods produced in Australia," and "ordinary course of business" are further elaborated in sections 269D, 269E, and 269P(3) respectively.
The obligations imposed on parties by this legislation include the requirement for the CEO to make a written TCO if the application meets the core criteria. This obligation is clearly stated in section 269P(3). Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on the application. Although in this instance no submissions were received, the process is intended to ensure transparency and fairness.
The legislation also imposes certain consequences for non-compliance, although the specific offences and penalties are not detailed in the provided text. Generally, under Australian law, breaches of customs regulations can result in both civil and criminal penalties. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity and intent behind the breach. The maximum penalties, however, are not specified in the provided excerpt but would typically be found in the relevant sections of the Customs Act 1901 or the associated regulations.