EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617302
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.
Genelite Pty Ltd applied for a TCO in respect of certain diesel powered AC generators on 18 September 2006.
Instrument
TCO No 0617302 was made on 08 December 2006. It declares that those certain diesel powered AC 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 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. 0617302 is taken to have come into force on 18 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 was enacted to provide a framework for the administration of customs and excise duties, and it includes provisions for the making of Tariff Concession Orders (TCOs). The Act was introduced to address the need for a flexible mechanism to provide tariff relief for goods where appropriate. Enacted by the Parliament of Australia, the Customs Act 1901 is designed to ensure that Australia’s trade and customs policies are effectively administered. The policy objective behind the introduction of TCOs is to provide relief from customs duties for imported goods where it is determined that no suitable Australian-made alternatives exist, thereby supporting industries and consumers by reducing the cost of imported goods. This mechanism helps in promoting fair competition and protecting domestic industries where necessary.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia and seeking a tariff concession on those goods. The Act provides for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply a lower rate of customs duty on specified goods. This applies specifically to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as determined by the CEO. The geographic reach of the Act is national, as it applies to all goods entering Australia. The Act does not specify exclusions or exemptions beyond those goods listed in section 269SJ, which cannot be subject to a TCO. The Act may extend its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty applied to various goods.
Key Provisions
The Tariff Concession Instrument No. 0617302, issued under section 269F of the Customs Act 1901, establishes a tariff concession order (TCO) for certain diesel powered AC generators, specifying a duty rate of free (section 269P(3)). The key provision in section 269C mandates that for a TCO application to be considered, no substitutable goods must have been produced in Australia at the time of the application. Section 269D defines "goods produced in Australia," section 269E defines "ordinary course of business," and section 269D further clarifies "substitutable goods" as those produced in Australia and capable of serving a use corresponding to that of the goods in question.
Entities or individuals who apply for a TCO under the Customs Act 1901 are required to ensure their application complies with the core criteria stipulated in section 269C. The Chief Executive Officer of Customs must then assess whether the application meets these criteria and, if satisfied, issue a written order as a TCO. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application. If no submissions are received, as was the case with TCO No. 0617302, the TCO proceeds without opposition.
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure their submissions adhere to the criteria outlined in section 269C. Secondly, the CEO is obligated to review the application and make a decision based on the statutory requirements. The CEO must also publish a notice in the Gazette, inviting submissions from interested parties as per section 269K(1). If no submissions are received, the TCO is deemed to be valid and comes into effect on the date of application submission.
Breaching the requirements set forth in the Customs Act 1901 can result in legal consequences. Although the Act does not specify penalties for non-compliance with TCO applications, it does outline potential civil or criminal actions for breaches of related customs regulations. For example, providing false information in a TCO application could lead to criminal charges under the Customs Act, with potential penalties including fines and imprisonment. The specific penalties depend on the nature and severity of the breach, as determined by the relevant courts.