EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807991
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 Corporation Pty LTd applied for a TCO in respect of certain hydro generator parts on 14 May 2008.
Instrument
TCO No 0807991 was made on 01 August 2008. It declares that those certain hydro 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 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. 0807991 is taken to have come into force on 14 May 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The primary aim of this legislation is to provide relief from customs duties on specific goods, thereby promoting economic efficiency and competitiveness. The Act allows for the application of lower customs duties on goods subject to a TCO, provided that certain criteria are met, such as the absence of substitutable goods produced in Australia. TCO No. 0807991, issued on 1 August 2008, provides tariff concessions for certain hydro generator parts, reducing the duty from 10% to free, and was introduced to support Toshiba International Corporation Pty Ltd's application. The instrument was made effective from 14 May 2008, the date the application was lodged, and no submissions opposing the concession were received. The policy objective is to facilitate the import of goods that are not domestically produced, thereby benefiting importers and potentially encouraging investment in industries reliant on imported components.
Scope and Application
The Tariff Concession Instrument No. 0807991, issued under the Customs Act 1901, applies specifically to certain hydro generator parts for which Toshiba International Corporation Pty Ltd made an application on 14 May 2008. The instrument was gazetted on 1 August 2008, and it provides a concession on customs duty for these goods, reducing the general duty rate of 10% to free duty. This concession applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument is effective from the date of the application, 14 May 2008, and it does not impose any new liabilities or affect the rights of any person other than the Commonwealth, thus allowing importers to apply for a refund of duty paid on these goods since the effective date. The application process and the criteria for tariff concessions are governed by the provisions of the Customs Act 1901, which include the requirement that no substitutable goods were produced in Australia on the date the application was lodged. The Chief Executive Officer of Customs made the decision to issue the concession based on these statutory criteria.
Key Provisions
The primary operative sections of Tariff Concession Order No. 0807991, made under the Customs Act 1901, involve the application and approval process for tariff concessions. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in sections 269C, 269B and 269D, they are required to make a written order 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 applies. For example, in this case, the CEO was satisfied that certain hydro generator parts were not substitutable with goods produced in Australia, and thus declared these parts to be subject to a zero duty rate under item 50 of Schedule 4.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must submit an application to the CEO, ensuring it is not in respect of goods specified in section 269SJ of the Act. The CEO must then determine if the application meets the core criteria. If the CEO is satisfied that the application meets these criteria, they must make a TCO as specified. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received, and the TCO was made as a result.
Section 269P(3) of the Customs Act 1901 specifies the penalties for non-compliance with the provisions of a TCO. However, in this particular case, no specific penalties are mentioned for breaches of the TCO No. 0807991. The act, however, generally includes provisions for both civil and criminal penalties for non-compliance with its requirements. These penalties can include fines and imprisonment, depending on the severity of the breach. The CEO's decision to make a TCO is a critical administrative process that must be carried out in accordance with the statutory requirements to avoid any potential legal repercussions.