EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603567
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 steam turbine bearings on 10 February 2006.
Instrument
TCO No 0603567 was made on 28 April 2006. It declares that those certain steam turbine bearings 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. 0603567 is taken to have come into force on 10 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 was amended to include the creation of Tariff Concession Orders (TCOs) under Part XVA, enabling the Chief Executive Officer of Customs to apply reduced customs duties on specific goods. Enacted by the Parliament of Australia, this legislation aimed to address the gap in tariff structures that could potentially hinder the importation of goods that are not domestically produced or are not substitutable by Australian-made alternatives. The policy objective is to foster economic efficiency and support industries by reducing the cost of imported goods, thereby facilitating their availability to Australian consumers and businesses. Tariff Concession Instrument No. 0603567, made on 28 April 2006, exemplifies this approach by granting a zero per cent duty rate on certain steam turbine bearings, down from the general rate of five per cent, based on the absence of substitutable Australian-made goods. This instrument, which came into force on the date of the application, 10 February 2006, ensures that no existing rights or liabilities of parties other than the Commonwealth are adversely affected.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to specific goods, granting them a lower rate of customs duty. The Act applies to individuals and entities that seek tariff concessions for imported goods, provided the goods are not specified in section 269SJ of the Act, which excludes certain items from concession eligibility. For a TCO to be issued, the applicant must demonstrate that no substitutable goods are produced in Australia, as outlined in sections 269C and 269D of the Act. The geographic reach of this legislation is national, with the Commonwealth having overarching jurisdiction over customs duties. Additionally, any subordinate instruments that may extend or restrict the application of the Act are subject to the same jurisdictional purview. Notably, the Act does not impose any liabilities on individuals or entities for actions taken prior to the issuance of a TCO, ensuring that the rights of importers are not adversely affected.
Key Provisions
The Tariff Concession Instrument No. 0603567, as outlined in the Customs Act 1901, facilitates the application of lower customs duty rates on specified goods through the creation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P(3)). Siemens Ltd applied for a TCO for certain steam turbine bearings on 10 February 2006, which was granted on 28 April 2006. This TCO applies item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduction of the duty rate from 5% to 0% for these goods.
The obligations imposed by the Act on the parties involved include the requirement for the Chief Executive Officer (CEO) of Customs to assess whether an application for a TCO meets the core criteria, such as ensuring no substitutable goods are produced in Australia (section 269C). If the CEO determines that the application is valid, a TCO must be made, specifying the reduced duty rate for the goods in question. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, although in this case, no objections were received (subsection 269K(1)).
In the event of non-compliance with the provisions of the Customs Act 1901 regarding the application or implementation of TCOs, there may be significant legal consequences. Although the explanatory statement does not explicitly detail offences or penalties, breaches of customs regulations can generally result in civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The specific penalties would be determined by the relevant sections of the Customs Act 1901 and any associated regulations.