EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514734
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.
Siemens Ltd applied for a TCO in respect of certain Pallet Elevators on 24 October 2005.
Instrument
TCO No 0514734 was made on 9 January 2006. It declares that those certain Pallet Elevators 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. 0514734 is taken to have come into force on 24 October 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. 0514734 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods imported into Australia. This legislative instrument, introduced by the Chief Executive Officer of Customs, applies to goods specified in the instrument, such as certain Pallet Elevators, for which a lower rate of customs duty is set at 0%. The Customs Act 1901 facilitates the process by which applications for tariff concessions can be made and assessed, ensuring that such applications meet the core criteria outlined in the Act. The policy objective is to provide tariff relief for goods that are not produced domestically and for which there are no suitable substitutes available in Australia, thereby encouraging the importation of these goods and potentially benefiting the market and consumers.
The enactment of this instrument by the CEO, following the application by Siemens Ltd on 24 October 2005, and subsequent consultation and publication processes, ensures that the rights of importers are protected and that no existing liabilities or rights are adversely affected by the tariff concession. This measure was taken to come into force on the date of the application, 24 October 2005, and provides a clear pathway for importers to seek refunds on duties paid on eligible goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0514734, made under the Customs Act 1901, applies to the specific case of certain Pallet Elevators for which Siemens Ltd applied on 24 October 2005. The instrument is applicable to the entities involved in the importation of these goods, effectively granting a concession by reducing the customs duty rate from 5% to 0%. This applies to the goods specified in the instrument, which are deemed to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The geographic and jurisdictional reach of this instrument is national, aligning with the provisions of the Customs Act 1901, which is a Commonwealth Act. The instrument does not extend or restrict application through subordinate instruments but is specific to the goods and circumstances outlined in the application by Siemens Ltd. It is important to note that the instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth in respect of anything done or omitted to be done before the date of registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0514734 under the Customs Act 1901 (section 269F) allow for the application of a Tariff Concession Order (TCO) for specific goods, provided certain conditions are met. According to section 269C, an application for a TCO will be considered if, on the date of the application, there are no substitutable goods produced in Australia in the ordinary course of business. This requirement ensures that the goods in question are not readily available domestically and thus warrant a tariff concession. Once these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a TCO, as per section 269P(3), which specifies a lower rate of customs duty for the goods in question.
The obligations imposed by the Act on the parties involved primarily revolve around the submission and review of TCO applications. The applicant must ensure that their application adheres to the stipulations set forth in section 269C and section 269B, particularly regarding the absence of substitutable goods produced in Australia. The CEO, on the other hand, is required to review the application to determine if it meets the core criteria and, if so, to issue a written order declaring the goods eligible for a reduced tariff rate. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might object to the TCO. In this case, the CEO did not receive any objections.
There are specific consequences for breaches of the provisions under this legislation. The Act does not explicitly outline offences or penalties for failing to comply with the requirements of a TCO, but general provisions of the Customs Act 1901 may apply. For example, if any party engages in fraudulent activities to obtain a TCO, they could face criminal charges under section 245 of the Act, which imposes penalties for fraud against the Commonwealth. The maximum penalty for such offences can include substantial fines and imprisonment, depending on the severity of the breach. Additionally, if the TCO is found to have been incorrectly applied, there could be financial repercussions for the party that benefitted from the concession, such as repaying any undue duty benefits received.