EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619969
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 audio frequency static converters on 19 December 2006.
Instrument
TCO No 0619969 was made on 09 March 2007. It declares that those certain audio frequency static converters 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. 0619969 is taken to have come into force on 19 December 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, provides a framework for the regulation of customs duties and the facilitation of trade. Among its provisions, Part XVA of the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty on specified goods. This mechanism was introduced to address the need for flexibility in the imposition of customs duties, allowing for tariff reductions where appropriate to support industry and economic growth. Instrument No. 0619969, made under this Act on 9 March 2007, concerns a Tariff Concession Order for certain audio frequency static converters applied for by Siemens Ltd on 19 December 2006. The policy objective, as reflected in this particular order, is to ensure that no substitutable goods were produced in Australia at the time of the application, thereby justifying the tariff concession. The instrument came into force on the date the application was lodged, with no submissions opposing the order received by the CEO.
Scope and Application
The Customs Act 1901, specifically through Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities seeking tariff concessions for specific goods, ensuring these goods are not already produced domestically in a commercial manner. The scope of the legislation extends across the Commonwealth of Australia and impacts the importation of goods by providing potential tariff reductions, which in turn affects importers who can apply for duty refunds on imported goods since the TCO's effective date. Notably, the Act does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken prior to the TCO's registration. The CEO's decision to grant a TCO is contingent upon satisfying certain core criteria, which include the absence of substitutable goods being produced in Australia in the ordinary course of business. This particular TCO, No. 0619969, relates to certain audio frequency static converters and was issued to Siemens Ltd, effectively granting these goods a tariff rate of free, as opposed to the general rate of 5%.
Key Provisions
The Customs Act 1901 (the Act) outlines a mechanism through which the Chief Executive Officer of Customs (the CEO) can grant Tariff Concession Orders (TCOs), as detailed in Part XVA. Under section 269F, individuals or entities can apply for a TCO in respect of specific goods. If the CEO is satisfied that the application does not involve goods prohibited under section 269SJ, they must then assess whether the application meets the core criteria. A TCO application meets these core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The definitions for these terms are provided in sections 269D, 269E, and 269F of the Act.
The obligations imposed by the Act on the CEO include the responsibility to determine whether a TCO application meets the core criteria and to make a written order if it does. This process also involves publishing a notice in the Gazette inviting any interested party to submit objections to the proposed TCO, as stipulated in subsection 269K(1). For instance, in the case of Siemens Ltd's application for a TCO regarding certain audio frequency static converters, the CEO published a notice in the Gazette and received no submissions opposing the TCO. Subsequently, the CEO issued TCO No 0619969, declaring that these goods would be subject to the conditions specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act also mandates that a TCO is deemed to come into force on the day the application was lodged, as per subsection 269S(1). This means that TCO No 0619969 is effective from 19 December 2006, the date of Siemens Ltd's application. Importantly, a TCO does not disadvantage any person (other than the Commonwealth) by affecting their rights as of the registration date or imposing liabilities for actions taken before the registration date. Importers of the goods covered by the TCO benefit from this legislation as they can apply for a refund of duty on goods imported since the effective date of the TCO, as outlined in paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 can lead to significant penalties and legal consequences. The Act does not explicitly state the specific offences or penalties related to breaches of the TCO provisions; however, general contraventions of the Customs Act can result in both civil and criminal penalties. Civil penalties can include fines up to $22,200 for individuals and substantially higher amounts for corporations, while criminal penalties may include imprisonment. The exact penalties depend on the nature and severity of the breach.