EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512624
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 0512624 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. 0512624 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. 0512624, enacted in 2005, amends the Customs Act 1901 by introducing tariff concessions that can be applied to certain imported goods, thereby addressing a gap in the tariff regime by providing relief to importers of specified goods. This instrument was introduced by the Chief Executive Officer of Customs under the authority granted by the Customs Act, aiming to facilitate trade by reducing the duty burden on particular goods, as long as they meet the criteria of not having substitutable goods produced in Australia. The policy objective here is to support the importation of specific goods by providing a concessional rate of customs duty, thereby enhancing the competitiveness of these goods in the Australian market without imposing additional liabilities or disadvantaging existing stakeholders.
Scope and Application
The Tariff Concession Order (TCO) No. 0512624 applies to certain Generators specified in the application by Nova Smic, which were granted a concession under the Customs Act 1901. The Act provides a framework for the Chief Executive Officer of Customs (CEO) to issue TCOs that reduce customs duty rates for goods where no substitutable goods are produced in Australia. The application of this legislation pertains specifically to the entities and goods involved in the import of these generators, thereby affecting the import duties applicable to them. The geographic and jurisdictional reach of the Act is Commonwealth-wide, as it is an instrument of the Customs Act 1901, which is a federal statute. The TCO does not extend to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty. The TCO No. 0512624 came into effect on 22 September 2005, the date the application was lodged, and it does not affect the rights of any person in respect of anything done before this date.
Key Provisions
The key operative sections of the Customs Act 1901, as relevant to the Tariff Concession Instrument No. 0512624, include sections 269C, 269F, and 269P(3) (sections 269C, 269F, and 269P(3)). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). Section 269C sets out the core criteria that must be met for a TCO to be granted, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) stipulates that if the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed rate of duty specified in the order.
Under this legislation, the CEO has the obligation to evaluate TCO applications against the specified core criteria. This involves determining whether there are any substitutable goods produced in Australia at the time the application is made. If the CEO is satisfied that the application meets the core criteria, they must then make a TCO declaring the applicable duty rate for the specified goods. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections or submissions against the TCO (subsection 269K(1)). The CEO is also required to consider any submissions received in response to this publication.
Failure to comply with the provisions of the Customs Act 1901 regarding the making of a TCO can result in legal consequences. If the CEO does not adhere to the legislative requirements, such as not evaluating an application against the core criteria or improperly granting a TCO, they could be subject to administrative or judicial review. However, the Explanatory Statement does not specify particular offences, penalties, or consequences for breach of the Act or the TCO. The general principle is that if the CEO fails to follow the legislative requirements, the TCO could be deemed invalid, and the duty rates would revert to the general rates specified in the Customs Tariff Act 1995. The potential for penalties or legal action would depend on the specific circumstances and the impact of any non-compliance on the rights of affected parties.