EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713613
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.
Toshiba International Corp Pty Ltd applied for a TCO in respect of certain power generator parts on 28 August 2007.
Instrument
TCO No 0713613 was made on 2 November 2007. It declares that those certain power generator 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 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. 0713613 is taken to have come into force on 28 August 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. 0713613 was enacted in 2007 under the Customs Act 1901. This legislative instrument was introduced to address the need for tariff concessions on specific imported goods that are not produced in Australia, thereby facilitating lower customs duties and potentially encouraging imports of goods where local production does not exist. The instrument was enacted by the Chief Executive Officer of Customs in response to an application by Toshiba International Corp Pty Ltd for a tariff concession on certain power generator parts. The primary objective of this instrument, as per the Customs Act 1901, is to ensure that the application for a tariff concession order is processed efficiently and transparently, allowing for the consideration of submissions from interested parties before a decision is made. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework whereby the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to apply a lower rate of customs duty on certain goods. This Act applies to any person who may apply for a TCO in respect of goods, provided the goods are not those specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application process requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business, as per section 269C of the Act. Once the CEO is satisfied that an application meets the core criteria, they must make a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This concession was applied in the case of Toshiba International Corp Pty Ltd, where a TCO was issued for certain power generator parts, reducing the duty from the general rate of 5% to 0%. The TCO, however, does not affect the rights of any person as at the date of registration and does not impose any liabilities on persons other than the Commonwealth in respect of actions taken prior to the registration date.
Key Provisions
The Tariff Concession Instrument No. 0713613, issued under the Customs Act 1901, establishes a tariff concession for certain power generator parts. According to section 269F, any person can apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application meets the core criteria outlined in section 269C, the CEO must make a TCO, which was the case for the power generator parts in question. These parts now have a reduced duty rate of 0%, down from the general rate of 5%, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations under this Act require applicants to ensure their applications are not in respect of goods specified in section 269SJ, which excludes certain items from being subject to a TCO. Additionally, the CEO is obligated to consider the application against the core criteria and to publish a notice in the Gazette, inviting any interested parties to submit any objections. The CEO must also ensure that the TCO does not disadvantage any person or impose new liabilities on them. For Toshiba International Corp Pty Ltd, the primary obligation was to apply for the TCO and provide the necessary information for the CEO’s assessment.
Failure to comply with the provisions of the Act or the terms of the TCO could lead to civil or criminal consequences. Although the explanatory statement does not specify the exact penalties, breaches of customs legislation generally can result in fines and, in more severe cases, imprisonment. For example, section 273 of the Customs Act 1901 provides for penalties for fraudulent importation, including fines of up to 10,000 penalty units or imprisonment for up to 10 years, or both. The specifics of penalties related to TCOs would need to be consulted in the broader context of the Customs Act and related regulations.