EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616834
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.
Cummins Diesel Australia applied for a TCO in respect of certain AC electric generators on 7 September 2006.
Instrument
TCO No 0616834 was made on 1 December 2006. It declares that those certain AC electric generators 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. 0616834 is taken to have come into force on 7 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 Tariff Concession Instrument No. 0616834 was enacted in 2006 under the Customs Act 1901, which provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument specifically addresses the issue of applying reduced customs duty rates to certain imported goods, in this case, certain AC electric generators, where no substitutable goods are produced in Australia. Cummins Diesel Australia applied for this concession on 7 September 2006, and after a review, the CEO determined that no submissions opposed the application and made the written order declaring that the specified generators are subject to a zero per cent duty rate, effective from the date of application lodging. This initiative aims to benefit importers by allowing them to apply for duty refunds on imports since the effective date of the TCO, without imposing any new liabilities on any parties.
Scope and Application
The Tariff Concession Instrument No. 0616834 is a legislative instrument under the Customs Act 1901, applying specifically to the application of tariff concession orders (TCO) for certain AC electric generators. This Act applies to individuals or entities seeking to import goods that may benefit from a concession on the customs duty, provided that such goods are not specified in section 269SJ of the Act and meet the core criteria outlined in section 269C. The TCO is applicable to the Commonwealth and takes effect from the date the application was lodged, as per section 269S(1). The geographic reach of the Act is national, as it applies to the entire territory of Australia. The legislation does not specify any exclusions or exemptions other than those mentioned in section 269SJ. Additionally, the Act allows for the extension or restriction of application through subordinate instruments, ensuring that the scope of the TCO can be appropriately managed and adapted as necessary.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0616834 (TCO No. 0616834) under the Customs Act 1901 (section 269F) involve the application for tariff concessions and the conditions under which such concessions may be granted. Section 269F allows for a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C stipulates that a TCO will be granted if the CEO determines that the goods do not have substitutable goods produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets these criteria, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
The obligations and requirements imposed by the Act on the parties involved are primarily centered around the application process and the criteria for granting a TCO. The CEO must assess whether the goods for which a TCO is requested are eligible, meaning they must confirm that no substitutable goods are produced in Australia on the application date. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the grant of a TCO. This notice serves to ensure transparency and provides an opportunity for public consultation, although in this case, no submissions were received. Once the TCO is issued, it comes into effect from the date the application was lodged, as per section 269S(1).
For breaches or non-compliance with the provisions of the Customs Act 1901, the Act provides for both civil and criminal penalties. Section 278 of the Act outlines the potential penalties for breaches, which can include fines and imprisonment. For instance, knowingly or recklessly making a false statement in an application for a TCO can result in penalties of up to $22,200 or imprisonment for up to two years, or both. Additionally, any person who contravenes the Act may also be subject to civil penalties, such as financial penalties, as specified under the Act and related regulations.
The TCO itself does not impose any liabilities on any person, as it is designed to benefit importers by potentially reducing or eliminating customs duty on the specified goods. Importers of such goods can apply for a refund of duty paid on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. This aspect of the legislation ensures that the TCO operates to the benefit of the importer without imposing any additional burdens or liabilities on them.