EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718310
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.
Stanwell Corp Ltd applied for a TCO in respect of certain power generators parts on 25 October 2007.
Instrument
TCO No 0718310 was made on 18 January 2008. It declares that those certain power generators 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 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. 0718310 is taken to have come into force on 25 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. 0718310, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods that are not produced domestically, thereby facilitating their importation without incurring high customs duties. This instrument allows for the application of a lower rate of customs duty on certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The instrument was necessitated by the application from Stanwell Corp Ltd for tariff concessions on certain power generator parts, which was approved by the Chief Executive Officer of Customs, leading to the creation of TCO No. 0718310. This tariff concession order, which came into force on the date of application, ensures that the importation of these parts is facilitated without the burden of a general rate of duty of 10%, instead applying a rate of free duty. The enactment of this instrument by the relevant authority under the Customs Act 1901 aims to support the importation of necessary goods that are not domestically produced, thereby benefiting importers and potentially stimulating economic activity.
Scope and Application
The Tariff Concession Instrument No. 0718310, issued under the Customs Act 1901, applies to the reduction of customs duty rates for specific goods, namely certain power generators parts, which are now subject to a zero rate of duty. This Act is relevant to entities or individuals who import these particular parts into Australia, effectively providing them with tariff relief. The Act’s jurisdictional reach is national, administered by the Chief Executive Officer of Customs, who is responsible for assessing and approving applications for tariff concessions. The application of the Act is not restricted to any particular state or territory, encompassing the entire Commonwealth of Australia. There are exclusions to the application of this Act, specifically outlined in section 269SJ, which lists goods that cannot be subject to a tariff concession order. The Act does not specify any thresholds for the application of these tariff concessions but relies on the core criteria, notably the non-production of substitutable goods in Australia as per sections 269C and 269D. The Act may be extended or restricted through subordinate instruments, which are not detailed in the provided text.
Key Provisions
The main operative sections of this legislation pertain to the establishment and implementation of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). Specifically, section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged, they must make a written order (section 269P(3)). This order declares the goods to which a specific item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively granting a tariff concession.
The obligations imposed by the Act on the parties involved are primarily centred around the application and assessment process for TCOs. The CEO must ensure that any TCO application is assessed against the core criteria, including verifying that no substitutable goods were produced in Australia (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. The Act also stipulates that a TCO comes into force on the day the application is lodged (subsection 269S(1)).
In terms of the consequences for non-compliance, the Act does not explicitly state offences or penalties for breaching the requirements related to TCOs. However, the general principles of administrative law and the inherent requirements of the Customs Act 1901 suggest that any failure to comply with the stipulated procedures could result in legal challenges or administrative penalties. For instance, if the CEO fails to properly assess an application or publish a notice as required, this could potentially lead to the TCO being contested in court. While specific maximum penalties are not detailed in the provided text, general breaches of administrative law can incur penalties under the applicable legislation, such as fines or other administrative sanctions.