EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711020
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.
Nicotra Australia Pty Ltd applied for a TCO in respect of certain industrial fans on 11 July 2007.
Instrument
TCO No 0711020 was made on 21 September 2007. It declares that those certain industrial fans 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. 0711020 is taken to have come into force on 11 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 was enacted by the Parliament of Australia to provide a framework for the regulation of customs and border control, including the imposition of customs duties. The Act was introduced to address the need for a comprehensive legislative scheme governing the importation and exportation of goods, the collection of customs duties, and the enforcement of related regulations. In particular, the Act was intended to streamline customs procedures, facilitate trade, and protect the economic interests of the Commonwealth. The Tariff Concession Instrument No. 0711020, issued under the Customs Act, allows for the concession of customs duties on specified goods, provided that certain conditions are met. This instrument was introduced to address specific trade needs by reducing the duty on particular goods, thus encouraging trade and investment. The policy objective of this instrument is to provide economic relief to businesses by lowering the cost of importing certain goods, thereby supporting the competitive position of Australian industries in the global market.
Scope and Application
The Tariff Concession Instrument No. 0711020 under the Customs Act 1901 applies to any entity or individual who imports certain industrial fans into Australia. The instrument was made by the Chief Executive Officer of Customs in response to an application from Nicotra Australia Pty Ltd, following the criteria set out in the Act. Specifically, the instrument declares that the certain industrial fans are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, following the satisfaction of the CEO that no substitutable goods were produced in Australia. The geographic reach of this Act is national, as it applies across all states and territories of Australia. The application of this Act is limited to the specific goods mentioned in the instrument and does not extend to any other goods unless specified by further orders under the Customs Act 1901. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person other than the Commonwealth in respect of anything done or omitted before the registration date. The Act may be further extended or restricted through subordinate instruments made under the authority of the Customs Act 1901.
Key Provisions
The main operative sections of this legislation pertain to the establishment and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C). A TCO can be applied for by any person (section 269F), and it provides for a lower rate of customs duty on the specified goods if certain conditions are met. Specifically, the CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If these conditions are satisfied, the CEO must issue a written order declaring that the specified goods are subject to a prescribed rate of duty (section 269P(3)). In this instance, TCO No. 0711020 was issued on 21 September 2007 for certain industrial fans, reducing the duty from 5% to 0%.
The obligations imposed by the Act include the requirement for the CEO to assess TCO applications against the core criteria outlined in section 269C, which mandates that no substitutable goods should be produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the TCO can proceed to be issued. The TCO in question, No. 0711020, was issued after the CEO determined that the application met the core criteria and that no submissions opposing the TCO were received.
Offences, penalties, or civil/criminal consequences for non-compliance with this legislation are not explicitly detailed in the explanatory statement provided. However, it is understood that the Customs Act 1901 contains various provisions that could apply to breaches, including fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act and related legislation. The focus of this particular legislation is on facilitating tariff concessions for specified goods rather than detailing penalties for non-compliance.