EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603282
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 centrifugal pump parts on 3 February 2006.
Instrument
TCO No 0603282 was made on 7 April 2006. It declares that those certain centrifugal pump 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 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. 0603282 is taken to have come into force on 3 February 2006.
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. 0603282 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods not produced domestically, thereby ensuring that Australian consumers and businesses have access to competitively priced imports. This legislative instrument was introduced to facilitate the granting of tariff concessions by the Chief Executive Officer of Customs, provided the application met the core criteria outlined in the Act. The policy objective is to allow the importation of goods that do not have Australian substitutes, thus promoting economic efficiency and consumer choice without imposing undue burdens on importers or the government. Enacted by the relevant legislature, this instrument enables a streamlined process for tariff concessions, ensuring that such decisions are made fairly and transparently, with an opportunity for public consultation.
Scope and Application
The Tariff Concession Instrument No. 0603282 under the Customs Act 1901 applies to the concession of customs duty rates on specific goods, namely certain centrifugal pump parts, as requested by Siemens Ltd. The Act permits the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) that reduces the customs duty rate on the specified goods, provided that the application meets certain criteria outlined in the Act. The TCO is effective from the date the application was lodged, 3 February 2006, and applies to the goods specified in the order. It is noteworthy that the TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth prior to the date of registration, ensuring that no disadvantage is caused to non-Commonwealth entities. The TCO, however, does benefit importers of the specified goods by allowing them to apply for a refund of duty on imports since the effective date of the TCO.
The geographic and jurisdictional reach of this legislation is national, as it operates under the authority of the Commonwealth as per the Customs Act 1901. The application of the TCO is specifically targeted at the goods in question, and there are no stated exclusions or exemptions within the text provided. The application process for a TCO involves consultation with interested parties, as per section 269K(1) of the Act, though in this instance, no submissions were received. The Act may extend or restrict the application of TCOs through subordinate instruments, which are not detailed in the text provided.
Key Provisions
The main operative sections of the Customs Act 1901, as applied to Tariff Concession Order (TCO) No. 0603282, establish the framework for applying for and granting tariff concessions on specific goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods, provided the application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Section 269C specifies that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that an application meets the core criteria, they must make a written order, or TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties governed by it include ensuring that the goods for which a TCO is sought do not have substitutable equivalents produced in Australia in the ordinary course of business. This requirement is outlined in section 269C. Siemens Ltd, in applying for the TCO, would have needed to demonstrate that no such substitutable goods were being produced in Australia at the time of the application. Additionally, the CEO of Customs is required to publish a notice in the Gazette, inviting any interested parties to lodge submissions against the TCO, as per section 269K(1). The CEO must also decide whether the application meets the core criteria based on the conditions set out in the Act.
Any breach of the provisions of the Customs Act 1901, including the requirements for TCO applications, may result in civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, it is clear that failure to comply with the Act's provisions could result in legal action. The CEO's decision-making process is also governed by the Act, and any errors in judgment could lead to judicial review or other legal challenges. The TCO itself ensures that the rights of importers are beneficially affected, and no liabilities are imposed on any person due to its provisions, as outlined in section 269S(1) and paragraph 126(1)(r) of the Regulations.