EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803927
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.
Gilbarco Australia Limited applied for a TCO in respect of certain electric motors on 11 March 2008.
Instrument
TCO No 0803927 was made on 30 May 2008. It declares that those certain electric motors 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. 0803927 is taken to have come into force on 11 March 2008.
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. 0803927 was enacted in 2008 under the Customs Act 1901. This legislation was introduced to address the issue of applying tariff concessions to specific goods that are not produced domestically, thereby promoting competition and providing economic benefits. The instrument was established to facilitate the Chief Executive Officer of Customs in making Tariff Concession Orders (TCOs) for goods that meet certain criteria, specifically where no substitutable goods are produced in Australia. This is intended to benefit importers by potentially reducing customs duty rates on these goods. The enactment of this instrument by the relevant authority aims to streamline the process for applying tariff concessions, ensuring that Australian businesses can access competitively priced goods while fostering a fair trading environment.
The Australian Parliament enacted this instrument to provide clarity and efficiency in the tariff concession application process. The objective is to ensure that the tariff concessions do not disadvantage any person other than the Commonwealth and do not impose new liabilities. By allowing for a lower rate of customs duty on specified goods, the legislation aims to enhance the economic viability of importing these goods, thereby supporting Australian industries that rely on such imports. This measure reflects a policy objective to support domestic industries by providing access to competitively priced goods, which can help in maintaining the competitive edge of Australian businesses in the global market.
Scope and Application
The Tariff Concession Instrument No. 0803927 under the Customs Act 1901 applies to the specific electric motors for which Gilbarco Australia Limited applied on 11 March 2008. The instrument, made by the Chief Executive Officer of Customs, provides for a lower rate of customs duty for these goods, thereby granting a tariff concession. This legislation is applicable nationally across Australia, falling under the Commonwealth jurisdiction. The Act allows for the application of tariff concessions where no substitutable goods are produced in Australia, which was the case for these specific electric motors, leading to their exemption from the usual 5% duty rate. The concession does not affect existing rights of any party except the Commonwealth and does not impose any new liabilities; however, it does entitle importers to apply for duty refunds on goods imported since the date of the application, which is considered the commencement date of the concession.
The Act’s scope includes any person or entity that meets the criteria for tariff concessions as outlined, focusing on goods that are not produced domestically as substitutable alternatives. The exclusions specified in section 269SJ of the Act pertain to goods that cannot be subject to a tariff concession, although no such exclusions were applicable in this particular case. The process includes mandatory publication in the Gazette to invite submissions, which did not occur for this instrument, indicating no objections were raised against the concession. The Act allows for further specification and application through subordinate instruments, ensuring flexibility and precision in its implementation.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (section 269F). An application for a TCO can be submitted by any person, and if the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, the application must be assessed against the core criteria outlined in section 269C. If the CEO determines that no substitutable goods are produced in Australia on the day the application is lodged, they are required to make a TCO (subsection 269P(3)).
Entities or individuals seeking a TCO must ensure that their application is valid and meets all specified criteria. This involves providing sufficient evidence that no substitutable goods are produced domestically, as defined by sections 269D and 269E. If the CEO issues a TCO, it declares that the specified goods will be subject to a lower rate of duty, as per a prescribed item in Schedule 4 of the Customs Tariff Act 1995. Once a TCO is issued, it is published in the Gazette with an invitation for any interested parties to lodge submissions against it (subsection 269K(1)). In the case of TCO No. 0803927, no submissions were received.
Breaches of the provisions outlined in the Customs Act 1901 can lead to legal consequences. The Act does not specify particular offences related to TCO applications, but any misuse or fraudulent claims could result in legal action under general customs laws. Penalties for contravening customs regulations can include fines and imprisonment, as prescribed by the Crimes Act 1914. The specific penalties vary depending on the nature and severity of the breach, but they can include substantial fines and imprisonment terms up to several years. The act of knowingly making false statements or providing misleading information in an application could also attract these penalties.