EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704676
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.
Bluescope Steel Ltd applied for a TCO in respect of certain ac synchronous motor parts on 28 March 2007.
Instrument
TCO No 0704676 was made on 15 June 2007. It declares that those certain ac synchronous motor parts 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 10%. 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. 0704676 is taken to have come into force on 28 March 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides for a scheme under which Tariff Concession Orders (TCOs) may be made to reduce customs duty on certain goods. The Act was amended to introduce this scheme to ensure that Australian businesses can access goods at a lower cost, which in turn can lead to economic benefits such as increased competitiveness and investment. In 2007, Tariff Concession Instrument No. 0704676 was introduced to provide tariff concessions for specific ac synchronous motor parts, reducing their duty rate from 10% to 0%. This was achieved following an application by Bluescope Steel Ltd, which demonstrated that no substitutable goods were produced in Australia, satisfying the core criteria under the Act. The instrument was effective from the date of the application, 28 March 2007, and no submissions were received against its publication in the Gazette, thereby ensuring a smooth implementation without any adverse impact on the rights of persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0704676 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been granted, thereby reducing the customs duty rate for those goods. The legislation allows for the application of a lower rate of duty on goods specified in a TCO, provided that the goods are not substitutable by any goods produced in Australia in the ordinary course of business. The CEO of Customs is responsible for making these orders based on applications from interested parties, ensuring that the goods in question meet the core criteria set out in the Act. The instrument's geographic reach is national, applying across Australia, and it affects entities involved in the importation of the specified goods. Any person or entity that imports the particular ac synchronous motor parts can benefit from the reduced duty rate, while the rights of existing importers are preserved, and they can apply for a refund of duties paid before the TCO's effective date. The application of the TCO is not retroactive, and it does not impose any new liabilities on importers or other stakeholders. Subordinate instruments may further extend or clarify the application of the TCO, but the primary focus remains on facilitating tariff concessions for eligible imported goods.
Key Provisions
The Tariff Concession Instrument No. 0704676, under the Customs Act 1901, pertains to a concession on customs duty for certain AC synchronous motor parts. The main operative sections relevant here are sections 269C, 269F, and 269P(3). Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, particularly that no substitutable goods are produced in Australia (as defined in section 269C), they must issue a written TCO, as stipulated in section 269P(3). This TCO applies a lower rate of duty to the specified goods. In this instance, the TCO No. 0704676 applies a 0% duty rate to the AC synchronous motor parts, which would otherwise attract a 10% duty rate.
The Act imposes several obligations and requirements on the parties involved. Firstly, any entity seeking a TCO must apply to the CEO, ensuring the application adheres to the criteria outlined in the Act. The CEO must then evaluate whether the application meets the core criteria, specifically checking if no substitutable goods are produced in Australia. If the CEO determines that the application meets the criteria, they must publish a notice in the Gazette inviting any objections or submissions from interested parties, as per subsection 269K(1). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO comes into force.
Failure to comply with the provisions of the Customs Act 1901 and the related TCO regulations can lead to various consequences. Although specific offences and penalties are not detailed in the text, breaches of the Act can generally result in both civil and criminal penalties. Civil penalties may include fines and other monetary penalties, while criminal penalties can include imprisonment, depending on the severity of the breach. The maximum penalties are not specified in the provided text, but they can vary widely based on the nature and impact of the non-compliance.
Overall, the Tariff Concession Instrument No. 0704676 streamlines the process for obtaining a duty concession on certain AC synchronous motor parts by reducing the duty from 10% to 0%. It ensures that the application process is transparent and inclusive, inviting submissions to maintain fairness and accuracy in the decision-making process. The Act and the TCO are designed to benefit importers by reducing their duty burden, provided they meet the criteria and follow the stipulated procedures.