EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613975
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 Pty Ltd applied for a TCO in respect of certain hydrogen gas seals on 24 August 2006.
Instrument
TCO No 0613975 was made on 17 November 2006. It declares that those certain hydrogen gas seals 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. 0613975 is taken to have come into force on 24 August 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. 0613975, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods, in this instance, certain hydrogen gas seals. The Customs Act 1901, as amended, allows for the establishment of Tariff Concession Orders (TCOs) which provide for a reduced rate of customs duty on goods specified in the order. The legislation empowers the Chief Executive Officer of Customs to make such orders, provided that the goods in question are not prohibited from such concessions and meet the criteria set out in the Act, specifically that no substitutable goods are produced in Australia. The primary objective of this instrument is to facilitate trade by lowering the cost of importing these specific goods, thereby encouraging their use and potentially aiding in the development of related industries within Australia. The instrument was enacted by the relevant legislature, and the policy objective is clearly to support trade and industry by providing tariff relief on certain imported goods.
Scope and Application
The Tariff Concession Instrument No. 0613975 under the Customs Act 1901 applies to goods specified in the instrument, in this case certain hydrogen gas seals, and those who import such goods. This legislation pertains to the Customs Act 1901, which is a Commonwealth Act, thereby extending its jurisdictional reach across Australia. The Act applies to entities and individuals involved in the importation of the specified goods, aiming to provide a lower rate of customs duty for these goods when they meet specific criteria. The application of the TCO is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia in the ordinary course of business. The TCO aims to benefit importers by reducing the duty rate from the general 5% to 0%. The Act does not impose any liabilities on any person other than the Commonwealth and does not affect the rights of persons as at the date of registration. Subordinate instruments may extend or restrict the application of the Act as necessary.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act), specifically as they pertain to Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, and 269SJ (269C, 269B, 269D, 269E, 269F, 269P, 269S, 269SJ). Section 269F allows for the application for a TCO by any person, provided the goods in question are not specified in section 269SJ as ineligible. The Chief Executive Officer of Customs (the CEO) must then determine if the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. Sections 269B and 269D provide definitions for terms such as "goods produced in Australia" and "ordinary course of business." If the application satisfies these criteria, the CEO is mandated by section 269P(3) to issue a TCO.
The Act imposes several obligations and requirements on both applicants and the CEO. Applicants must ensure their applications are valid and pertain to goods not listed in section 269SJ. The CEO has the responsibility to review applications promptly and determine whether they meet the core criteria, ensuring that no substitutable goods were produced in Australia on the day the application was made. Furthermore, the CEO is required to publish a notice in the Gazette (269K(1)) inviting any interested parties to submit any objections to the proposed TCO. Should no objections be received, the CEO proceeds to issue the TCO as specified in section 269S.
The Act delineates specific offences and penalties for breaches of its provisions, though in this context, it is primarily concerned with civil consequences rather than criminal penalties. For instance, if a TCO is issued in error or if there is non-compliance with the conditions of the TCO, the importer or applicant may face civil consequences. Specifically, incorrect claims for duty refunds under paragraph 126(1)(r) of the Regulations can lead to financial penalties or the requirement to repay any wrongly claimed duties. Additionally, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, safeguarding against liabilities imposed due to actions taken before the TCO's effective date.
In conclusion, the provisions of the Customs Act 1901, as they relate to Tariff Concession Orders, establish a structured process for applying for and granting TCOs, ensuring that no substitutable goods are produced in Australia. The CEO’s role is pivotal in reviewing applications and making determinations based on clear criteria. While the Act does not impose heavy criminal penalties, it does outline civil consequences for non-compliance, ensuring that the scheme operates fairly and effectively.