EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514831
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.
Linak Australia Pty Ltd applied for a TCO in respect of certain linear actuator position controllers on 25 October 2005.
Instrument
TCO No 0514831 was made on 23 January 2006. It declares that those certain linear actuator position controllers 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 free.
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. 0514831 is taken to have come into force on 25 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. 0514831 was enacted in 2006 under the Customs Act 1901. This legislation was introduced to address the need for tariff concessions for specific goods, enabling a lower rate of customs duty for those goods that are subject to a Tariff Concession Order (TCO). The instrument was formulated by the Chief Executive Officer of Customs, who has the authority to make TCOs under section 269F of the Act. The primary policy objective behind this legislation is to provide relief by way of reduced customs duty on goods that are not produced domestically, thus supporting industries that rely on importing such goods.
The Customs Act 1901, enacted by the Parliament of Australia, facilitates the process of applying for tariff concessions, ensuring that the application meets certain criteria, such as the absence of substitutable goods produced in Australia. This instrument specifically addresses the application by Linak Australia Pty Ltd for certain linear actuator position controllers, resulting in a concession that sets the duty rate at free, as opposed to the general rate of 5%. This legislative measure aims to benefit importers by potentially allowing them to claim refunds on duties paid on these goods imported since the TCO was deemed effective, without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0514831 applies to the specific linear actuator position controllers for which Linak Australia Pty Ltd made an application under Part XVA of the Customs Act 1901. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty for certain goods, provided the core criteria are met. This includes the requirement that no substitutable goods were produced in Australia on the day the application was lodged. The TCO applies nationally, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The CEO must ensure that the application does not involve goods specified in section 269SJ of the Act, which are ineligible for TCOs. The instrument also ensures that the rights of the Commonwealth and third parties are not adversely affected by the TCO, and importers can apply for duty refunds on eligible goods. The scope of the Act can be further refined through subordinate instruments, which may specify additional criteria or conditions for TCOs.
Key Provisions
The main operative sections of this legislation, specifically under the Customs Act 1901 and its associated Tariff Concession Order (TCO) No. 0514831, detail the process for applying for and making a TCO. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for specified goods, provided these goods are not listed in section 269SJ of the Act, which excludes certain goods from this scheme. If the CEO is satisfied that the application complies with the core criteria stipulated in sections 269C and 269P, they are mandated to make a written order, i.e., a TCO, declaring that the goods in question are subject to a prescribed tariff item. Section 269K(1) also requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO. In this instance, TCO No. 0514831 was made on 23 January 2006, applying to certain linear actuator position controllers, effective from 25 October 2005.
The obligations and requirements imposed by this legislation primarily rest on the CEO of Customs. They must ensure that any TCO application is not for goods excluded under section 269SJ, and they must verify that the application meets the core criteria set out in sections 269C and 269P. This involves confirming that no substitutable goods were produced in Australia at the time of the application. Once satisfied, the CEO is required to make a written TCO, as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette under section 269K(1), providing an opportunity for public submissions. Although no submissions were received for this particular TCO, the process remains a formal requirement.
Regarding the potential consequences for breach, the Customs Act 1901 does not explicitly outline criminal or civil penalties for failing to comply with the provisions of a TCO or the application process. However, any misuse of the tariff concession or fraudulent claims could potentially lead to investigations under other sections of the Customs Act or related legislation, possibly resulting in penalties for fraud or misrepresentation. The more immediate impact of non-compliance would likely be financial, as importers would not be entitled to the tariff concessions if the TCO was improperly obtained or used. The TCO itself does not impose any liabilities on persons other than the Commonwealth, and it does not affect existing rights or impose new liabilities for actions taken prior to its registration.