EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710728
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.
Cummins South Pacific Pty Ltd applied for a TCO in respect of certain AC generators on 05 July 2007.
Instrument
TCO No 0710728 was made on 14 September 2007. It declares that those certain 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. 0710728 is taken to have come into force on 05 July 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 Parliament of Australia, provides for the imposition of customs duties on imported goods. The Act was introduced to address the need for regulating the import and export of goods and collecting duties on imports to protect domestic industries and generate revenue for the government. The Tariff Concession Instrument No. 0710728 was made under Part XVA of the Customs Act 1901, which allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. A TCO applies a lower rate of customs duty on goods specified in the order if certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective of the TCO is to provide tariff concessions to importers of specified goods, thereby reducing the cost of importing and potentially increasing competition in the market. Cummins South Pacific Pty Ltd applied for a TCO for certain AC generators, which was subsequently granted as no substitutable goods were produced in Australia at the time of application. The TCO came into effect on the date the application was lodged and does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the registration date.
Scope and Application
The Tariff Concession Instrument No. 0710728, under the Customs Act 1901, applies to entities or individuals seeking tariff concessions for specific goods imported into Australia. The legislation is pertinent to the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) that lower the customs duty rate on certain goods. The scope of the Act encompasses goods that are subject to a TCO, provided they meet the core criteria stipulated in section 269C, which includes the absence of substitutable goods produced in Australia. This instrument is effective across Australia as it falls under the Commonwealth jurisdiction, impacting the entire nation. The exclusions are clearly defined in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act also extends its application through subordinate instruments, which may further detail the criteria and procedures for tariff concessions. The TCO No. 0710728, for instance, applies to specific AC generators and came into effect on the date the application was lodged, 5 July 2007, without retroactively affecting any existing rights or imposing new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation include section 269C, which sets out the core criteria that must be met for a Tariff Concession Order (TCO) to be granted, and section 269P(3), which mandates that a TCO must be issued if these criteria are satisfied. Section 269SJ specifies the types of goods that cannot be subject to a TCO, while section 269K(1) requires the Chief Executive Officer of Customs (CEO) to invite public submissions on TCO applications. Once a TCO is issued, it applies retroactively to the date the application was lodged, as per section 269S(1).
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ, and that the core criteria set out in section 269C are met. This involves verifying that no substitutable goods were produced in Australia at the time the application was lodged. The CEO must also publish a notice in the Gazette inviting public submissions on the application, as per section 269K(1). Importers of the goods subject to the TCO have the right to apply for a refund of duties paid since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Act can lead to significant consequences. While the explanatory statement does not detail specific offences or penalties, it is implied that any breach of the Act or the regulations could result in civil or criminal liability. The exact penalties would be determined in accordance with other relevant legislation, but could potentially include fines, imprisonment, or other legal sanctions for non-compliance.
In summary, this legislation facilitates the granting of tariff concessions for certain goods by setting out clear criteria and processes that must be followed by the CEO of Customs. It ensures that the rights of importers are protected and that the application process is transparent and inclusive of public input. Compliance with the Act is crucial, as failure to adhere to its provisions could lead to serious legal repercussions.