EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606348
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 air cargo transfer vehicle parts on 4 April 2006.
Instrument
TCO No 0606348 was made on 30 June 2006. It declares that those certain air cargo transfer vehicle 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. 0606348 is taken to have come into force on 4 April 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 Australian Parliament, establishes a framework for the application and administration of customs duties, and includes provisions for Tariff Concession Orders (TCOs) which reduce or eliminate customs duties on specific goods under certain conditions. The Act was designed to streamline the process of applying for tariff concessions, thereby facilitating trade and addressing specific economic needs or strategic considerations. Instrument No. 0606348, made under the authority of the Customs Act, was introduced to provide tariff concessions for certain air cargo transfer vehicle parts, reflecting a policy objective to support industries reliant on imported components where local production is not feasible. The instrument came into force on the date of the application, ensuring that the rights of importers are protected and they can benefit from the reduced duty rates applicable to the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0606348, made under section 269F of the Customs Act 1901, applies to entities or individuals seeking tariff concessions for specific goods, in this case certain air cargo transfer vehicle parts. This instrument is created to facilitate the reduction of customs duty on these goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of this instrument is determined by the Chief Executive Officer of Customs (CEO) and is contingent on the fulfilment of core criteria outlined in section 269C of the Act, which requires that no substitutable goods are produced domestically. The instrument's scope is national, applying across Australia, and its commencement date aligns with the date the application was lodged, which was 4 April 2006. The instrument does not affect the rights of any person, except to the benefit of importers who can apply for a refund of duty on goods imported since the effective date of the concession. No liabilities are imposed on any person under this instrument.
Key Provisions
The Tariff Concession Order No. 0606348 under the Customs Act 1901 provides specific concessions on customs duties for certain air cargo transfer vehicle parts. According to section 269F, a party can apply for a Tariff Concession Order (TCO) if the goods in question are not listed in section 269SJ, which includes goods that cannot be subject to a TCO. The CEO must then determine whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. These definitions are further clarified in sections 269D, 269E, and 269P(3). If the CEO is satisfied that the application meets these criteria, a written TCO is issued, as per section 269P(3).
The obligations imposed by the Act on the parties involved primarily focus on the application and review process. The CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who may have reasons to oppose the concession to lodge a submission, as per subsection 269K(1). In this case, Siemens Ltd applied for the TCO on 4 April 2006, and no submissions were received in response to the published notice. Furthermore, the TCO, as stated in subsection 269S(1), is considered to have come into force on the date the application was lodged, which was also 4 April 2006. This means that from this date, the specified air cargo transfer vehicle parts qualify for the tariff concession, effectively reducing the duty rate from 5% to free.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly detail specific criminal or civil penalties for failing to comply with the TCO provisions. However, the general legal framework under which the Customs Act operates implies that any significant non-compliance could lead to enforcement actions, potentially including fines or other administrative penalties. The primary concern for parties governed by the TCO would be ensuring adherence to the duty rate as specified in the order, and any failure to comply could result in disputes or investigations by the relevant authorities.
Overall, the TCO No. 0606348 provides a clear mechanism for reducing customs duties on certain air cargo transfer vehicle parts, provided the criteria are met. The process ensures that no substitutable goods are produced in Australia and that the application adheres to the specified conditions. Parties must comply with the obligations to publish notices and review applications, and any breaches may result in administrative consequences.