EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512620
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 0512620 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. 0512620 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise, including the ability to make Tariff Concession Orders (TCOs). The Act was designed to facilitate trade by allowing for reduced customs duties on certain goods, provided specific criteria are met. The problem or gap addressed by this legislation is the need to allow Australian businesses to access imported goods at a lower cost, thereby enhancing their competitiveness and facilitating economic growth. Tariff Concession Instrument No. 0512620, introduced under this Act, specifically aims to provide tariff concessions on certain generators, as applied by Nova Smic, by reducing the duty from 5% to 0%, effective from 22 September 2005. The policy objective, as stated, is to ensure that these tariff reductions do not disadvantage any party and benefit importers by potentially allowing duty refunds for goods imported since the TCO came into force.
Scope and Application
The Customs Act 1901, particularly under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders apply to specific goods for which an application has been made and approved, resulting in a concession in the rate of customs duty. The Act applies to any person who applies for a TCO in respect of goods that are not prohibited under section 269SJ. The application process involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. Once the CEO is satisfied that the application meets the core criteria, they are required to make a written order, effectively reducing the duty on specified goods. The scope of this Act is national, with its application extending across Australia as per the jurisdictional reach of the Commonwealth. The Act does not specify exclusions or exemptions other than those listed in section 269SJ, and the application of the Act can be further defined through subordinate instruments, such as the Customs Tariff Act 1995. For instance, TCO No. 0512620, made on 16 December 2005, exemplifies how the Act operates to provide duty concessions on certain generators, effectively setting their duty rate to 0% from the date the application was lodged.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0512620, as referenced under the Customs Act 1901, pertain to the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269F and 269P(3)). Section 269F allows a person to apply for a TCO for goods, while section 269P(3) stipulates that the CEO must make a TCO if certain criteria are met. Specifically, the CEO must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The definitions for "goods produced in Australia", "ordinary course of business" and "substitutable goods" are provided in sections 269D, 269E and 269F respectively.
The Act imposes specific obligations on the CEO regarding the processing and granting of TCOs. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their reasons against the TCO (subsection 269K(1)). The CEO must then decide whether to grant the TCO based on the application meeting the core criteria, as outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO. The CEO is also required to consider whether the goods are specified in section 269SJ, which lists goods that cannot be subject to a TCO. Furthermore, the CEO must ensure that the TCO does not adversely affect the rights of any person (other than the Commonwealth) in relation to activities conducted before the TCO's registration date.
There are no explicit offences or penalties detailed within this particular TCO or the Customs Act 1901 in relation to the granting or misuse of TCOs. However, any breaches of the conditions or misrepresentations made during the application process could potentially lead to administrative actions or legal consequences under other relevant laws. The primary focus of the TCO and the Act is on the correct and fair application of tariff concessions, ensuring that the concessions are granted appropriately and that the rights of all parties are protected.