EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615053
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 switchgear on 26 September 2006.
Instrument
TCO No 0615053 was made on 5 February 2007. It declares that those certain switchgear 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. One submission objecting to the TCO application was received from Nu-Lec Industries Pty Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Wilson Transformer Co Pty Ltd, Tyco Electronics and ABB Australia Pty Ltd to lodge a written submission.
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. 0615053 is taken to have come into force on 26 September 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 Parliament of Australia, establishes a framework for tariff concessions through the creation of Tariff Concession Orders (TCOs). This Act addresses the gap by allowing the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on goods that meet certain criteria, enhancing trade efficiency and competitiveness. The objective is to provide relief to businesses by reducing the cost of imported goods, thereby supporting the economic growth and competitiveness of Australian industries. The Tariff Concession Instrument No. 0615053, made on 5 February 2007, exemplifies this legislative intent by reducing the duty on specific switchgear from 5% to 0%, facilitating smoother trade operations for Siemens Ltd and benefiting importers who can claim refunds for duties paid on these goods since the application date.
Scope and Application
The Tariff Concession Instrument No. 0615053, made under the Customs Act 1901, applies to the reduction of customs duty rates on specific goods, in this case, certain switchgear, as determined by the Chief Executive Officer of Customs. This Instrument is applicable to Siemens Ltd, who made the application for tariff concession, and any other entities or individuals importing the specified switchgear into Australia. The concession is a national measure, applicable across all jurisdictions within Australia, and aims to lower the duty from the general rate of 5% to 0% for the goods specified in the Instrument. The Act excludes any goods that are listed in section 269SJ of the Act, which outlines those items that are ineligible for tariff concessions. The Instrument may be further extended or modified through subordinate legislation, providing flexibility in managing tariff concessions for different goods in future scenarios.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0615053, made under the Customs Act 1901, involve the application and assessment process for a Tariff Concession Order (TCO) and the subsequent implementation of such an order. Specifically, Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. Once the CEO receives an application, Section 269C requires the CEO to determine if the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia at the time the application was lodged. If the application satisfies these criteria, the CEO must issue a TCO, as stipulated in Section 269P(3), effectively reducing the customs duty on the specified goods.
The obligations imposed by the Act on the parties involved are multi-faceted. The applicant, in this case Siemens Ltd, must ensure that their application for a TCO is valid and meets all specified criteria, including demonstrating that no substitutable goods were produced in Australia. The CEO, upon receiving the application, must evaluate the application against these criteria, as outlined in Section 269C. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties, as per Section 269K(1). Additionally, if the CEO deems it necessary, they may invite specific parties to submit written oppositions, as provided for in Section 269M(1). These obligations ensure a transparent and inclusive process for evaluating and potentially granting tariff concessions.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can result in significant consequences. While the Act does not explicitly state civil or criminal penalties for non-compliance with TCOs, breaches of related provisions could potentially incur penalties under other sections of the Customs Act or relevant legislation. For instance, deliberately providing false information in an application could be considered a form of fraud, which may carry penalties under Section 238 of the Customs Act. Additionally, any failure to adhere to the conditions set by a TCO could result in the revocation of the concession, thereby reverting the duty rates to their original levels. The potential consequences underscore the importance of accurate and truthful applications and adherence to the prescribed procedures.
The process of issuing a TCO under the Customs Act 1901 is designed to ensure that tariff concessions are granted fairly and transparently. The key steps involve application submission by the interested party, evaluation by the CEO against the core criteria, public notice and invitation for submissions, and finally, the issuance of the TCO if all conditions are met. This structured approach aims to balance the interests of the applicant, the broader industry, and the government, ensuring that tariff concessions are applied judiciously and do not unfairly disadvantage other stakeholders.