EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612373
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 thyristor valve coolers on 25 July 2006.
Instrument
TCO No 0612373 was made on 13 October 2006. It declares that those certain thyristor valve coolers 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. 0612373 is taken to have come into force on 25 July 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 Commonwealth Parliament, provides a framework for managing customs duties and tariffs in Australia. In particular, Part XVA of the Act outlines the process for issuing Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain imported goods. The problem or gap this legislation aims to address is the facilitation of imports by reducing customs duty on specific goods, provided that no substitutable goods are produced in Australia. This encourages international trade and helps businesses by lowering the cost of importing certain goods.
The Tariff Concession Instrument No. 0612373, published in 2006, was introduced to grant a TCO to Siemens Ltd for certain thyristor valve coolers, reducing the duty rate from 5% to 0%. This was made possible as no substitutable goods were produced in Australia at the time. The policy objective here is to ensure that the rights and benefits of importers are positively impacted, while not imposing any new liabilities on individuals or entities. The CEO of Customs, upon receiving the application from Siemens Ltd, assessed that the core criteria were met, and subsequently made the TCO, which came into effect on the date of the application, 25 July 2006.
Scope and Application
The Tariff Concession Instrument No. 0612373 under the Customs Act 1901 applies to individuals or entities that seek a concession on the customs duty for specific imported goods. In this instance, Siemens Ltd applied for a tariff concession order (TCO) for certain thyristor valve coolers, which was approved by the Chief Executive Officer of Customs. The Act governs the process through which an application for a TCO is assessed and determined, ensuring that no substitutable goods are produced in Australia at the time of application. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the customs duties that apply to these goods. The Act excludes certain goods from being subject to a TCO, as specified in section 269SJ. Once a TCO is made, it retroactively applies from the date the application was lodged, thereby potentially entitling importers to a refund of duties paid on the specified goods from that date. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The Tariff Concession Instrument No. 0612373 under the Customs Act 1901 provides a significant reduction in customs duty for certain thyristor valve coolers. Section 269F (subsections 269P and 269C) establishes the process by which an applicant can request a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia on the date the application was lodged, a TCO is issued. This effectively reduces the customs duty rate from the general rate of 5% to 0% for the specified goods (section 269P(3)).
The Act imposes specific obligations on the CEO regarding the assessment and issuance of TCOs. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit a response. This ensures transparency and provides an opportunity for public consultation. Once the CEO is satisfied that the application meets the criteria, the TCO is issued, and it comes into force on the date the application was lodged, as per section 269S(1). The CEO's decision must be based on a thorough review of the application and the relevant provisions of the Act, ensuring that no substitutable goods are produced in Australia on the application date.
Failure to comply with the requirements of the Customs Act 1901 can lead to significant legal consequences. While the Act does not explicitly state the penalties for non-compliance with TCOs, breaches of the Customs Act generally may result in criminal or civil penalties. The severity of these penalties can vary depending on the nature and extent of the breach, but they may include fines and imprisonment for criminal offences, as well as civil penalties as stipulated under the Act. Additionally, the CEO has the authority to impose fines and other sanctions for non-compliance with the provisions related to TCOs.