EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512623
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 0512623 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. 0512623 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. 0512623 was enacted in 2005 to address the need for tariff concessions on specific goods under the Customs Act 1901. The instrument was developed to provide a lower rate of customs duty for certain goods, in this case, Generators, by making a Tariff Concession Order (TCO) through the Chief Executive Officer of Customs. The objective of this legislation is to ensure that goods for which there are no substitutable alternatives produced in Australia are eligible for tariff concessions, thus supporting import activities and potentially boosting market availability and affordability. This instrument was enacted by the relevant legislature and is designed to streamline the process for obtaining tariff concessions, thereby facilitating trade and economic activities by reducing import costs for specified goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the establishment of Tariff Concession Orders (TCOs) through the authority of the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking tariff concessions for imported goods, provided these goods do not fall under the exclusions listed in section 269SJ and meet the core criteria set out in section 269C. The scope of the Act encompasses the application process for TCOs, the determination of eligibility based on the absence of substitutable goods produced in Australia, and the subsequent reduction or exemption of customs duties on specified goods. The TCO's jurisdiction is national, aligning with the overarching provisions of the Customs Act 1901, and extends to the regulation of imported goods as per the Customs Tariff Act 1995. The Act's application can be further refined or expanded through subordinate instruments, allowing for detailed specifications of eligible goods and the imposition of conditions related to tariff concessions. Notably, the Act ensures that the introduction of a TCO does not adversely affect the rights of any person other than the Commonwealth, nor does it impose new liabilities on those parties.
Key Provisions
The Tariff Concession Instrument No. 0512623 under the Customs Act 1901 (section 269F) enables the Chief Executive Officer of Customs (CEO) to establish Tariff Concession Orders (TCOs) for specific goods. These TCOs allow for a reduced rate of customs duty on the specified goods, provided the application for a TCO is not for goods listed in section 269SJ of the Act, which cannot be subject to a TCO. For instance, Nova Smic successfully applied for a TCO for certain Generators on 22 September 2005, and the CEO subsequently made TCO No. 0512623 on 16 December 2005, declaring these generators to be subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, down from the general rate of 5%.
The CEO must determine if a TCO application meets the core criteria outlined in section 269C of the Customs Act 1901. These criteria are met if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for these terms are provided in sections 269D, 269E, and 269F of the Act. For example, for Nova Smic's application, the CEO confirmed that no substitutable goods were being produced in Australia, hence the TCO was granted.
Entities governed by the Customs Act 1901, such as Nova Smic, must adhere to the procedures for applying for a TCO, including ensuring their applications meet the specified criteria and responding to any invitations for submissions as required by the Act. For instance, once an application is accepted, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any objections or submissions regarding the TCO. In this case, the CEO did not receive any submissions opposing the TCO for the generators.
The Act imposes obligations on the CEO to assess applications for TCOs and make written orders if the core criteria are met. The TCOs must be published in the Gazette, and any objections must be considered before a final decision is made. In the instance of TCO No. 0512623, the CEO determined that no substitutable goods were produced in Australia, and hence, the TCO was issued. Additionally, under the Customs Act 1901, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person other than the Commonwealth.
In terms of consequences for non-compliance, the Act does not explicitly state specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, the Act's overarching provisions and other related legislation might impose penalties for non-compliance with customs regulations, including fines and imprisonment. For instance, any misrepresentation or incorrect information in the application process could lead to penalties under the Customs Act 1901 or other applicable laws.