EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716975
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.
Siemens Ltd applied for a TCO in respect of certain generator fin fan coolers on 8 October 2007.
Instrument
TCO No 0716975 was made on 14 December 2007. It declares that those certain generator fin fan coolers 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. 0716975 is taken to have come into force on 8 October 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. 0716975 was enacted under the Customs Act 1901 with the aim of addressing a gap in the tariff concession scheme for specific goods. This legislative instrument was introduced to provide tariff concessions to certain generator fin fan coolers, applied for by Siemens Ltd on 8 October 2007. The instrument was enacted to ensure that the Chief Executive Officer of Customs (CEO) could make a Tariff Concession Order (TCO) that would exempt these goods from the general customs duty, thereby providing a benefit to importers by setting the duty rate at free, as opposed to the general rate of 5%. The instrument was brought into effect on the date the application was lodged, 8 October 2007, and no submissions were received in opposition to the TCO application. The policy objective is to support industries by reducing the cost of imported goods, thereby potentially increasing competitiveness and encouraging the importation of these specific goods into Australia.
Scope and Application
The Tariff Concession Instrument No. 0716975 under the Customs Act 1901 applies to specific goods, in this case, certain generator fin fan coolers, and the process for obtaining a Tariff Concession Order (TCO) is overseen by the Chief Executive Officer of Customs. The Act allows for the application of lower rates of customs duty on goods that are the subject of a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business. The CEO must assess whether the application meets the core criteria before making a written order declaring that the specified goods are subject to a prescribed item in the Customs Tariff. The application process involves publishing a notice in the Gazette and inviting submissions from any interested parties, although in this case, no submissions were received. The geographic and jurisdictional reach of this Act is national, as it applies across Australia in accordance with the Commonwealth’s legislative powers. The TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the order’s effective date, and it does not affect the rights of any person except to beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0716975 (TCO No. 0716975) under the Customs Act 1901, particularly section 269C (3) (referenced in parentheses), require the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) if they are satisfied that a TCO application meets the core criteria. For Siemens Ltd’s application for a TCO regarding certain generator fin fan coolers, the CEO determined that no substitutable goods were produced in Australia on the day the application was lodged, satisfying section 269C. Consequently, a TCO was issued, declaring that these specific goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby reducing the duty from 5% to free.
The obligations imposed by the Act on parties or entities it governs include the requirement for the CEO to assess whether an application for a TCO meets the core criteria, which involves determining whether substitutable goods are being produced in Australia. Section 269K(1) necessitates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. This ensures transparency and allows stakeholders to voice any concerns. In the case of Siemens Ltd’s application, the CEO did not receive any submissions in response to the Gazette notice.
The Act does not explicitly detail specific offences, penalties, or consequences for non-compliance with the TCO provisions. However, it is implied that failure to adhere to the requirements for issuing a TCO or improper application could lead to legal repercussions, as the Act provides mechanisms for oversight and review. For example, if a TCO is made without meeting the core criteria, it could be subject to challenge in court, potentially leading to the TCO being overturned. Additionally, any misrepresentation in the application process could attract penalties under other provisions of the Customs Act or related legislation.
In summary, TCO No. 0716975 allows for a tariff concession on certain generator fin fan coolers, subject to strict criteria outlined in the Customs Act 1901. The CEO's role in assessing applications and ensuring compliance with these criteria is crucial, as is the requirement for transparency through the Gazette notice. Although the Act does not explicitly detail penalties for non-compliance, the potential for legal challenges and penalties under other related laws underscores the importance of adhering to the statutory requirements.