EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603466
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 steam generation plant solenoid valve assembly on 3 February 2006.
Instrument
TCO No 0603466 was made on 21 April 2006. It declares that those certain steam generation plant solenoid valve assembly 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. 0603466 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for tariff concession orders (TCOs) to provide relief on customs duties for certain imported goods. These TCOs aim to ensure that Australian consumers and businesses have access to competitively priced goods that are not produced locally. The Tariff Concession Instrument No. 0603466, introduced on 21 April 2006, addresses the need for tariff concessions for specific goods, in this case, certain steam generation plant solenoid valve assemblies, by applying a concessional duty rate of zero instead of the standard 5%. This legislative measure was implemented to promote fair trade practices and support economic efficiency by ensuring that Australian importers are not at a disadvantage compared to their overseas counterparts. The process includes public consultation as per the Act's requirements, although in this instance, no submissions were received opposing the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which an applicant has successfully applied, provided the goods are not specified in section 269SJ as ineligible for tariff concessions and meet the core criteria outlined in section 269C. The criteria necessitate that, on the date of application, no substitutable goods are being produced in Australia in the ordinary course of business. This Act applies to any person or entity seeking a tariff concession for specific goods and operates within the Commonwealth of Australia. The application process involves publishing a notice in the Gazette to invite any interested parties to submit objections, although in the case of TCO No. 0603466, no submissions were received. The TCO in question came into force on the date the application was lodged, 3 February 2006, and it benefits importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities on any person.
Key Provisions
The primary operative sections of this legislation include section 269F, which allows for applications to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C sets out the core criteria that a TCO application must meet, including the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO is mandated by section 269P(3) of the Customs Act 1901 to issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. In this instance, TCO No. 0603466 was issued for certain steam generation plant solenoid valve assemblies, declaring them to be subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Customs Act 1901 imposes specific obligations on the CEO regarding the processing of TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit reasons why the TCO should not be made. In this case, no submissions were received in response to the Gazette notice for TCO No. 0603466. The Act also requires that a TCO is deemed to come into force on the day the application for the TCO was lodged, as per subsection 269S(1). This means that TCO No. 0603466 is effective from 3 February 2006.
The Act outlines certain consequences for non-compliance with its provisions. However, the explanatory statement does not specify any particular offences, penalties, or civil/criminal consequences for breaches in the context of TCOs. The rights of importers will be positively affected, with the potential to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person and 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 in respect of anything done or omitted to be done before the date of registration.