EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828157
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.
Conergy Pty Limited applied for a TCO in respect of certain wind powered downwind generators on 26 August 2008.
Instrument
TCO No 0828157 was made on 14 November 2008. It declares that those certain wind powered downwind generators 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. 0828157 is taken to have come into force on 26 August 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 was amended to introduce the scheme under which Tariff Concession Orders (TCOs) can be made, allowing for a lower rate of customs duty on certain goods. Enacted by the Parliament of Australia, this legislation addresses the need to facilitate trade by reducing duty on goods for which no suitable Australian-made alternatives exist. The Tariff Concession Instrument No. 0828157, made on 14 November 2008, is an example of this scheme in action, where the Chief Executive Officer of Customs granted a concession to Conergy Pty Limited for certain wind powered downwind generators, setting the duty rate at free, whereas the general rate is 5%. This concession was introduced without any adverse submissions following the required public consultation, thereby ensuring that the policy objective of promoting competitive imports while protecting local industries is met effectively.
Scope and Application
The Tariff Concession Instrument No. 0828157, under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been made. This legislation primarily concerns entities and individuals involved in the importation of certain wind powered downwind generators, as exemplified by the case of Conergy Pty Limited. The instrument was designed to reduce the customs duty on these goods from the general rate of 5% to a duty-free rate, contingent on the absence of substitutable goods produced in Australia. The application of this instrument extends across the Commonwealth of Australia, impacting importers who can benefit from reduced duty rates for the specified goods. However, it is important to note that the TCO does not disadvantage any existing rights of individuals or entities other than the Commonwealth, nor does it impose new liabilities on them for actions taken prior to the TCO's registration. Any potential changes or further applications of the TCO may be extended or restricted through subordinate instruments, although the specific details of these instruments are not elaborated in the provided explanatory statement.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0828157 are found in Part XVA of the Customs Act 1901, particularly sections 269C, 269F, 269P, and 269SJ. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning specific goods. If the CEO determines that the application complies with the core criteria set out in section 269C, a TCO is issued. This order then applies a prescribed rate of customs duty to the specified goods, as outlined in Schedule 4 of the Customs Tariff Act 1995. Section 269P(3) mandates that the CEO must make a written order if satisfied that the application meets the core criteria, and section 269SJ specifies goods that cannot be subject to a TCO.
The Act imposes several obligations on the parties involved. The applicant, such as Conergy Pty Limited, must ensure that the goods they seek a TCO for do not have substitutable equivalents produced in Australia. The CEO, upon receiving a valid application, must evaluate whether the application meets the core criteria and decide on the issuance of a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the application. This ensures transparency and allows for potential objections to be raised before a TCO is made.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. If an entity submits a false or misleading application for a TCO, this could be considered an offence under the Act. Such actions might attract penalties as prescribed by relevant laws, including potential fines or other legal repercussions. Additionally, any person found to be in breach of the terms of a TCO may face civil or criminal penalties as stipulated by the Act and associated regulations.
In summary, the Tariff Concession Instrument No. 0828157 provides a mechanism for obtaining reduced customs duty on specific goods, subject to certain conditions and criteria outlined in the Customs Act 1901. The CEO has a key role in evaluating applications and ensuring compliance with the statutory requirements. Non-compliance can result in significant penalties, highlighting the importance of adhering to the provisions of the Act.