EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702370
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.
Powereng Pty Limited applied for a TCO in respect of certain current and/or voltage transformers on 14 February 2007.
Instrument
TCO No 0702370 was made on 09 May 2007. It declares that those certain current and/or voltage transformers 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. 0702370 is taken to have come into force on 14 February 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. 0702370, enacted under the Customs Act 1901, aims to provide tariff concessions for specific goods, thereby addressing the need for reduced customs duties to support certain industries or imports. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods not specified in section 269SJ of the Act, provided they meet the core criteria set out in sections 269C, 269B, and 269D. The instrument was introduced to ensure that the application of lower rates of customs duty encourages the import of goods that are not readily available in Australia, fostering economic growth and competition. The enactment of this legislation by the Parliament of Australia underscores a policy objective to streamline the import process and provide relief to industries that rely on specific imported goods. The TCO, effective from the date of application, ensures that no person, other than the Commonwealth, is disadvantaged by its implementation.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which applies to goods specified in the order. This legislative framework allows for a lower rate of customs duty on goods that meet the criteria outlined in the Act. An application for a TCO can be made by any person, provided the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from TCO consideration. The CEO must assess whether the application meets the core criteria, notably whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied, they must issue a TCO, which was the case with Tariff Concession Instrument No. 0702370 for certain current and/or voltage transformers, reducing the duty rate from the general rate of 5% to free. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for this particular TCO. The TCO does not disadvantage any person or impose new liabilities, and it comes into effect on the day the application was lodged, in this case, 14 February 2007.
Key Provisions
The Tariff Concession Instrument No. 0702370 under the Customs Act 1901 (section 269C) facilitates the application process for Tariff Concession Orders (TCOs), which permit a lower rate of customs duty on certain goods. A person may apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, which include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)), a TCO will be made.
Entities or individuals who wish to benefit from a TCO must ensure their applications meet these core criteria, particularly focusing on the definition of 'substitutable goods' provided in section 269D. The CEO's role involves making a written order declaring that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995, thereby applying a reduced rate of duty. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds with the TCO.
Under this Act, there are specific obligations placed on both the CEO and applicants. The CEO must rigorously verify the core criteria and ensure transparency by publishing notices and inviting submissions. Applicants must provide sufficient evidence that no substitutable goods were produced in Australia on the application date. The Act also ensures that the rights of existing importers are preserved, allowing them to apply for refunds of duty paid on imports since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
In terms of legal consequences, any breach of the conditions set by the TCO could potentially lead to civil or criminal penalties. While the specific penalties are not detailed in the provided text, under Australian law, breaches of customs regulations can result in fines and, in severe cases, imprisonment. The precise penalties would be determined by the relevant courts based on the nature and severity of the breach.