EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516759
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.
Hitachi Limited applied for a TCO in respect of certain coal feeder parts on 06 December 2005.
Instrument
TCO No 0516759 was made on 03 March 2006. It declares that those certain coal feeder parts 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. 0516759 is taken to have come into force on 06 December 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 regulation of customs and excise duties, among other things. To address the need for tariff concessions on certain goods, the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA, reducing customs duty for goods specified in these orders. This mechanism was introduced to ensure that Australian businesses are not unduly burdened by high customs duties, particularly when locally produced substitutable goods do not exist. The instrument in question, Tariff Concession Instrument No. 0516759, was made on 03 March 2006, and it was in response to an application by Hitachi Limited for a TCO concerning certain coal feeder parts. The policy objective is to facilitate the import of these goods by applying a zero rate of duty, thereby promoting competitive pricing and potentially enhancing the efficiency and cost-effectiveness of the importing business.
Scope and Application
The Customs Act 1901 applies to individuals and entities who import goods into Australia, and it governs the customs duty and tariff concessions applicable to such goods. Specifically, Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs to provide lower rates of customs duty on certain goods, provided that the application meets the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The application process involves a notice being published in the Gazette, inviting submissions from interested parties, although in the case of TCO No 0516759, no submissions were received. The TCO is effective from the date the application was lodged and benefits importers by allowing them to apply for a refund of duty on goods imported since the commencement date of the TCO. The Act extends its application nationally across Australia, and it does not impose liabilities on any person other than the Commonwealth. The application and effect of the TCO are subject to the provisions of the Customs Tariff Act 1995, which is referenced through subordinate instruments to determine the specific rates of duty and tariff concessions applicable to the goods in question.
Key Provisions
The Customs Act 1901, specifically under Part XVA, governs the process of Tariff Concession Orders (TCOs), as outlined in sections 269C, 269B, 269D, 269E, and 269SJ. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO, which permits a lower rate of customs duty on specified goods. To qualify, the application must meet the core criteria, primarily that no substitutable goods are produced in Australia at the time of application (section 269C). Substitutable goods are defined as those produced in Australia that serve a similar use to the goods in question (section 269D and 269E). Once the CEO is satisfied that the application meets these criteria, a written order is issued under section 269P(3). This was the case for TCO No. 0516759, issued on 03 March 2006, which applied a free rate of duty to certain coal feeder parts, as no substitutable goods were produced in Australia.
The CEO is mandated to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections to the TCO. In the case of TCO No. 0516759, no objections were received, and thus the order was made without any adverse submissions. The TCO came into effect on the date the application was lodged, 06 December 2005, as stipulated in subsection 269S(1). Importantly, the TCO does not affect any rights or liabilities of persons other than the Commonwealth as of the registration date, thereby protecting existing rights and imposing no new liabilities.
Should there be a breach of the provisions under the Customs Act 1901, various penalties and consequences may apply. Offences under the Act can result in both civil and criminal penalties. For instance, knowingly or recklessly providing false information in an application for a TCO could result in a fine or imprisonment. The exact penalties depend on the severity of the offence and the specific provisions of the Act, but they can include substantial fines or imprisonment for more serious breaches. These measures ensure compliance and integrity within the tariff concession scheme.