EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700573
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 air compressors on 11 January 2007.
Instrument
TCO No 0700573 was made on 10 April 2007. It declares that those certain air compressors 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. 0700573 is taken to have come into force on 11 January 2007.
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. 0700573, enacted in 2007, amends the Customs Act 1901 by introducing tariff concessions for certain air compressors. This legislative instrument was enacted by the Australian Parliament to address a gap in the duty regime for specific imported goods, allowing for lower rates of customs duty under certain conditions. The policy objective of this concession is to provide relief to businesses importing these goods, thereby potentially stimulating economic activity and competition within the market. The instrument was introduced following an application by Genelite Pty Ltd, and it specifies that the goods in question are subject to a 0% duty rate as opposed to the general rate of 5%. The instrument ensures that the rights of importers are protected and that no existing rights or liabilities are adversely affected by the concession.
Scope and Application
The Tariff Concession Instrument No. 0700573 under the Customs Act 1901 applies to any person who makes an application to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) in respect of goods, provided the application is not in relation to goods specified in section 269SJ of the Act. This legislation pertains to the imposition of a lower rate of customs duty on goods that are subject to a TCO, and it is applicable nationally across Australia, as it falls under the Commonwealth's legislative jurisdiction. The Act does not apply to goods specified in section 269SJ, which are those that cannot be subject to a TCO. The application process for a TCO is outlined in section 269F, and the CEO must ensure that the application meets the core criteria specified in sections 269C, 269D, 269E, and 269P. Once a TCO is made, it comes into force on the day the application was lodged, as per subsection 269S(1). The rights of importers are beneficially affected as they may apply for a refund of duty on goods imported since the effective date of the TCO. The legislation does not disadvantage or impose liabilities on any person in relation to actions taken before the TCO was registered.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0700573 under the Customs Act 1901 revolve around the application and processing of Tariff Concession Orders (TCOs). Section 269F (1) permits an individual or entity to apply for a TCO if they believe that the goods they import are eligible for reduced customs duty. Once an application is submitted, the Chief Executive Officer (CEO) of Customs must determine whether it meets the core criteria (section 269C). This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If these criteria are satisfied, the CEO is required to issue a written order that specifies the lower customs duty applicable to the goods (section 269P(3)).
The Act imposes specific obligations on both applicants and the CEO. Applicants must ensure that their TCO application is complete and meets the core criteria as stipulated in section 269C. They must also provide any necessary documentation to support their application. The CEO, on the other hand, is obligated to review the application and determine its validity. This involves conducting an assessment to confirm that no substitutable goods were produced in Australia on the application date (section 269D and section 269E). Once the CEO is satisfied, they must issue a TCO within the timeframe stipulated by the Act.
The Customs Act 1901 does not explicitly outline offences or penalties for breaches related to TCOs. However, non-compliance with the Act’s requirements can lead to civil and administrative consequences. For example, if an application is found to be incomplete or fraudulent, it may be rejected. In cases where a TCO has been issued but subsequently found to be incorrectly granted, the CEO may revoke the order, and the applicant could be liable for any overpaid duties. The maximum penalties or consequences for such breaches are not specified within this particular legislation but are generally governed by the broader provisions of the Customs Act 1901, which may include fines or other administrative sanctions.