EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515684
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 hydraulic turbine governors (regulators) on 15 November 2005.
Instrument
TCO No 0515684 was made on 30 January 2006. It declares that those certain hydraulic turbine governors (regulators) 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. 0515684 is taken to have come into force on 15 November 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise in Australia. One significant feature of the Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced customs duties on specific goods under certain conditions. This legislative provision was introduced to facilitate trade by reducing the cost of imported goods, thereby making them more competitive with locally produced alternatives. The Explanatory Statement for Tariff Concession Instrument No. 0515684, made on 30 January 2006, highlights the application of this mechanism in a specific case involving Siemens Ltd's application for tariff concessions on certain hydraulic turbine governors. The instrument declares that these goods are subject to a zero rate of duty, as no substitutable goods were produced in Australia at the time of the application, thus benefiting importers by reducing their duty liabilities. The instrument’s commencement date is aligned with the date the application was lodged, ensuring that the tariff concessions are effective from the application date.
Scope and Application
The Tariff Concession Instrument No. 0515684 is a legislative instrument under Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods. This particular instrument applies to Siemens Ltd's application for tariff concession on certain hydraulic turbine governors (regulators), where the CEO determined that these goods qualify for a lower rate of customs duty. The application of the instrument is restricted to the specific goods mentioned and does not affect the rights of any person other than the Commonwealth as at the date of registration, ensuring that no one is disadvantaged or imposed with new liabilities by the application of this instrument. The instrument came into force on the date the application was lodged, 15 November 2005, and no submissions were received in opposition to the tariff concession. The instrument's application is limited to the Commonwealth jurisdiction and does not extend to state or territory laws unless otherwise specified by subordinate instruments.
Key Provisions
The main operative sections of this legislation focus on the process and conditions under which Tariff Concession Orders (TCOs) can be made under the Customs Act 1901. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The CEO must then determine whether the application meets the core criteria outlined in section 269C. If satisfied, the CEO is required to make a written order, as per section 269P(3), declaring the goods to which the TCO applies.
The Act imposes specific obligations on the parties involved. The CEO must assess applications against the criteria set out in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made, as required by subsection 269K(1). In this instance, the CEO did not receive any submissions in response to the notice.
Under the Customs Act 1901, there are civil and criminal consequences for breaches. However, the specific provisions of this particular TCO, such as TCO No. 0515684, do not detail specific offences or penalties. The TCO itself does not impose any liabilities on any person. Instead, it aims to provide a tariff concession for certain hydraulic turbine governors (regulators), reducing the duty from 5% to free, provided the goods are not substitutable and produced in Australia. Importers of these goods can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.