EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512619
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 0512619 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. 0512619 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. 0512619 was enacted in 2005 under the Customs Act 1901 to address the need for a streamlined process in granting tariff concessions for specific goods. This legislation, enacted by the Australian Parliament, aims to facilitate the reduction of customs duties for certain imported goods, thereby supporting trade and economic efficiency by making imported goods more competitive. The instrument was introduced in response to an application by Nova Smic for tariff concessions on certain generators, where it was determined that no substitutable goods were being produced in Australia. This instrument reduces the duty on these generators from the general rate of 5% to 0%, effective from the date of the application, 22 September 2005. The process involved publishing a notice in the Gazette to invite submissions, though none were received, leading to the issuance of the tariff concession order.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which applies to certain imported goods to provide lower rates of customs duty. This Act applies to individuals and entities that import goods into Australia and seeks to address circumstances where no substitutable goods are produced domestically. The scope of this legislation is national, impacting the entire Commonwealth. The application of TCOs is restricted by specific exclusions as outlined in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The CEO is mandated to assess applications against core criteria, as stipulated in sections 269C and 269D, which require, among other things, that no substitutable goods be produced in Australia in the ordinary course of business. Once the CEO determines that an application meets these criteria, a TCO is issued, as demonstrated in the case of TCO No. 0512619 concerning certain Generators. This TCO, effective from the date of application on 22 September 2005, sets the duty rate at 0% for these goods, reducing it from the general rate of 5%. The CEO is also required to facilitate public consultation on TCO applications, although in this instance, no submissions were received.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). Section 269C of the Act establishes the core criteria that must be satisfied for a TCO application to be approved. Specifically, it mandates that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). For the purpose of these provisions, ‘goods produced in Australia’ is defined by section 269D, ‘ordinary course of business’ by section 269E, and ‘substitutable goods’ by section 269D in respect of goods that are the subject of a TCO application, meaning 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 (s 269B).
Under the Act, the CEO is obligated to make a written TCO if satisfied that the application meets the core criteria (s 269P(3)). This obligation includes publishing a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (s 269K(1)). Once a TCO is made, it comes into force on the day on which the application for the TCO was lodged (s 269S(1)). For instance, in the case of TCO No. 0512619, which was made on 16 December 2005 in respect of certain Generators, the TCO came into force on 22 September 2005, the day the application was lodged.
Any breach of the provisions under the Customs Act 1901 can lead to various civil and criminal consequences. While the explanatory statement does not specify the exact penalties, breaches of the Customs Act 1901 generally attract penalties under the Customs Act itself and associated regulations. These can include fines and imprisonment, with the severity of the penalty depending on the nature and severity of the breach. For example, under section 224 of the Customs Act, a person who commits an offence by making a false or misleading statement in relation to a matter prescribed by regulation is liable to a penalty of up to 5,000 penalty units or imprisonment for up to five years, or both, if the offence is committed in relation to goods the importation or exportation of which is prohibited or restricted.