EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512625
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 0512625 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. 0512625 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. 0512625, enacted in 2005, is a legislative instrument under the Customs Act 1901, which provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs). The primary objective of this Act is to address the economic benefits that can be derived from reducing customs duties on specific goods, provided that there are no substitutable goods produced domestically. By doing so, it aims to encourage the importation of these goods by making them more competitively priced in the Australian market. The Tariff Concession Instrument No. 0512625 was enacted by the Parliament of Australia, and its policy objective is to provide relief to importers of specific goods by reducing their customs duty rates, thereby potentially stimulating trade and investment in the relevant sectors.
The instrument, which came into effect on 22 September 2005, was made in response to an application by Nova Smic for a TCO in respect of certain generators. After evaluating the application, the CEO determined that the application met the core criteria, as no substitutable goods were being produced in Australia. Consequently, the CEO issued the TCO, resulting in a reduction of the customs duty rate for these generators from 5% to 0%. No submissions opposing the TCO were received during the consultation period, indicating broad acceptance of the instrument's objectives and implications.
Scope and Application
The Tariff Concession Instrument No. 0512625 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been approved by the Chief Executive Officer of Customs (CEO). This legislation targets the importation of certain generators, where the general customs duty rate is reduced from 5% to 0%, following an application by Nova Smic. The Act ensures that no substitutable goods are produced in Australia, thereby justifying the concession. The instrument is effective from the date the application was lodged, 22 September 2005, without retroactively affecting the rights of any person other than the Commonwealth. The legislation does not impose any liabilities on any person and beneficially affects the rights of importers, who can apply for a refund of duty on goods imported since the effective date of the TCO. The application of this legislation is national, extending across Australia in accordance with the Customs Act 1901. The scope of the legislation is limited to the specific goods identified in the TCO, and no exclusions or exemptions are explicitly mentioned in the provided text.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Instrument No. 0512625 under the Customs Act 1901, revolve around the establishment and application of Tariff Concession Orders (TCOs) as detailed in sections 269C, 269F, 269P, and 269S. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO regarding specified goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, and does not pertain to goods excluded under section 269SJ, a TCO must be issued. Section 269P(3) mandates that the CEO must then make a written order declaring the goods to which the prescribed tariff item applies, as specified in the application.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application meets the core criteria, which include verifying that no substitutable goods were produced in Australia in the ordinary course of business, as per section 269C. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. For this particular TCO, no submissions were received, indicating no objections to the concession.
Breaching the provisions of the Customs Act 1901 can lead to significant consequences. Although the explanatory statement does not detail specific offences or penalties for failing to comply with the TCO requirements, the broader Customs Act does outline penalties for non-compliance with customs regulations. These can include substantial fines and imprisonment for serious breaches, reflecting the Act's intent to enforce compliance with its terms rigorously. The TCO itself does not impose liabilities on any person but rather aims to provide tariff concessions to eligible goods, ensuring that importers can benefit from reduced duty rates as permitted by the legislation.