EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605621
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 oil circulators on 23 March 2006.
Instrument
TCO No 0605621 was made on 16 June 2006. It declares that those certain steam turbine oil circulators 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. 0605621 is taken to have come into force on 23 March 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. 0605621, enacted in 2006 under the Customs Act 1901, addresses the problem of ensuring that tariff concessions are granted to importers of goods for which no substitutable Australian-produced alternatives exist, thus providing a pathway for the reduction of customs duties. The Customs Act 1901, managed by the Australian Parliament, outlines the framework for Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply lower customs duties on specific goods. The primary objective of this legislation is to foster a competitive environment for Australian industries by allowing the import of goods that are not produced domestically, thereby preventing potential disadvantages to consumers and businesses. The explanatory statement highlights that the application by Siemens Ltd for a TCO concerning steam turbine oil circulators was processed in accordance with the legislative criteria, resulting in a duty reduction from 5% to 0%, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty to certain goods. These orders are applicable to goods for which an application is made and subsequently approved by the CEO, provided that the goods do not fall under the exclusions specified in section 269SJ of the Act. A TCO application will be considered if, at the time of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269C, 269D, and 269E of the Act. Once approved, the CEO issues a written order that specifies the goods to which a particular tariff item applies, as outlined in Schedule 4 of the Customs Tariff Act 1995. This Act applies nationally across Australia and its territories, affecting all relevant entities involved in the import of specified goods. The application process requires public consultation, where any objections can be lodged, though no submissions were received for TCO No. 0605621. The tariff concession is effective from the date the application was lodged, which in this case is 23 March 2006, and does not retroactively impact the rights or liabilities of any person other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, specifically relevant to the Tariff Concession Instrument No. 0605621, include sections 269F, 269C, 269B, and 269P(3). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. If the application is deemed valid and meets the core criteria outlined in section 269C, the CEO must make a written order specifying that the goods are subject to a lower rate of customs duty. This concession applies if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269B and 269E. Under section 269P(3), the CEO must declare the specific tariff item from the Customs Tariff Act 1995 that applies to the goods.
The Act imposes several obligations on the parties involved. The CEO of Customs must review the TCO application to determine if it meets the core criteria, ensuring that no substitutable goods were produced in Australia. This involves verifying the production status and the nature of the goods. Additionally, the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission. In the case of TCO No. 0605621, no submissions were received in response to this notice. Importers of the affected goods may apply for a refund of duty on goods imported since the TCO was taken to have come into force.
The Act includes provisions for penalties and consequences in the event of a breach. Although the explanatory statement does not specify the exact penalties, it is understood that breaches of the Customs Act 1901 can result in both civil and criminal penalties. Civil penalties can include fines, while criminal penalties can include imprisonment, depending on the nature and severity of the breach. The specific penalties are detailed in other sections of the Act and related regulations, but the potential for significant consequences underscores the importance of compliance with the Act's provisions.