EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804429
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.
Onesteel Manufacturing Pty Ltd applied for a TCO in respect of certain electric motor parts on 19 March 2008.
Instrument
TCO No 0804429 was made on 6 June 2008. It declares that those certain electric motor 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 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. 0804429 is taken to have come into force on 19 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. 0804429 was enacted under the Customs Act 1901 to address a specific need identified by Onesteel Manufacturing Pty Ltd for tariff concessions on certain electric motor parts. This legislative instrument was introduced to provide relief to the company by reducing the customs duty on these parts, which were not being produced in Australia and therefore qualified for the concession. The Tariff Concession Orders (TCO) scheme, as outlined in Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to apply a lower rate of customs duty on goods subject to a TCO if certain criteria are met. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, thereby approving the application for a tariff concession on these electric motor parts. This instrument was developed and enacted by the relevant legislature to ensure that Australian businesses can operate competitively without being unduly burdened by high customs duties on non-domestically produced goods.
Scope and Application
The Tariff Concession Instrument No. 0804429 under the Customs Act 1901 applies to goods specifically designated by Onesteel Manufacturing Pty Ltd, targeting certain electric motor parts. The application of this instrument is limited to the goods specified in the instrument, which benefit from a lower rate of customs duty as declared by the Chief Executive Officer of Customs (CEO). The instrument operates within the framework set by the Customs Act, specifically Part XVA, which allows for Tariff Concession Orders (TCOs) to be made to provide tariff concessions on goods where certain criteria are met, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The instrument is applicable on a national level across Australia, as it pertains to the application of the Customs Act, which is a Commonwealth Act. However, it is important to note that the Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ of the Customs Act. The instrument does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of persons as at the date of registration of the TCO. The CEO's decision to make the TCO is subject to consultation as required by subsection 269K(1) of the Act, although in this case, no submissions were received in response to the published notice. The TCO comes into force on the date the application was lodged, as per subsection 269S(1) of the Act, and allows for the beneficial application of tariff concessions from that date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. A Tariff Concession Order allows for a reduced rate of customs duty on certain goods, provided the CEO is satisfied with the application and the goods do not fall under the restrictions outlined in section 269SJ of the Act (section 269F). The core criteria for approving a TCO application are detailed in section 269C, which mandates that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively. Once the CEO confirms that the application meets these criteria, they are required to issue a written TCO under section 269P(3).
The obligations under the Customs Act 1901 for parties involved with a TCO are straightforward yet crucial. The CEO must evaluate each application to ensure it complies with the statutory requirements and does not relate to goods excluded by section 269SJ. Upon approval, the CEO must not only issue the TCO but also publish a notice in the Gazette inviting public submissions, as mandated by subsection 269K(1). This ensures transparency and allows stakeholders to voice any concerns regarding the TCO. The TCO itself does not retroactively affect the rights of any person, safeguarding against any disadvantages to third parties before the order's effective date. Importers, however, stand to benefit as they may apply for duty refunds on goods imported since the TCO's effective date.
The Customs Act 1901 also delineates the consequences for breaches related to Tariff Concession Orders. While the explanatory statement does not explicitly mention penalties for non-compliance with TCOs, it is understood that breaches of the Customs Act could lead to civil or criminal penalties, depending on the severity and intent behind the breach. The Act’s overarching provisions on penalties and enforcement mechanisms suggest that any significant non-compliance could result in fines, imprisonment, or both, as typically applied under customs regulations. The specifics of penalties would be determined based on the nature of the breach and the discretion of the court or relevant authority.