EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831075
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 (in cluding 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.
ABB Australia Pty Ltd applied for a TCO in respect of certain transformers on 12 September 2008.
Instrument
TCO No 0831075 was made on 5 December 2008. It declares that those certain transformers 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. 0831075 is taken to have come into force on 12 September 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 enacted to regulate the importation of goods into Australia, including the imposition of customs duties. The Act was amended to include the scheme for Tariff Concession Orders (TCOs), which was introduced to address the gap in providing relief for imported goods where no domestic substitutes are produced. The Customs Act allows the Chief Executive Officer of Customs to grant a TCO, reducing the rate of customs duty on certain imported goods if they meet specific criteria, such as the absence of substitutable goods produced in Australia. This legislative change aims to facilitate trade by lowering the cost of imported goods, thereby encouraging economic activity. The enacting body responsible for this legislation is the Australian Parliament, which established the framework for tariff concessions to support trade and economic policy objectives.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on specified goods. This legislation applies to any individual or entity seeking to import goods that may qualify for tariff concessions, provided the goods are not specified in section 269SJ as ineligible for such concessions. The Act operates on a national scale within Australia, providing a streamlined process for businesses and importers to benefit from reduced customs duties. The TCO scheme is subject to the condition that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged, as defined by sections 269C, 269D, and 269E of the Act. Additionally, the CEO must publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received in this instance. The TCO comes into effect on the date the application is lodged, thereby protecting the rights of importers to claim duty refunds for goods imported since the effective date, without imposing any liabilities on them or any other persons.
Key Provisions
The main operative sections of this legislation (sections 269C, 269P(3), and 269S(1)) establish the criteria for Tariff Concession Orders (TCOs) and the process for making such orders. Section 269C specifies that a TCO application is valid if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a written order must be made declaring that the goods are subject to a prescribed tariff item. Section 269S(1) provides that a TCO is effective from the day the application is lodged.
Under this Act, the CEO of Customs has the responsibility to determine whether an application for a TCO meets the core criteria and, if so, to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. This process ensures that all relevant parties have the opportunity to be heard before a TCO is issued. Additionally, the Act ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO as it pertains only to actions taken after the TCO's effective date.
Failure to comply with the requirements of this Act could result in civil or criminal consequences. While the explanatory statement does not explicitly mention any offences or penalties, it is reasonable to infer that breaches of the Act could lead to legal action under the Customs Act 1901. This might include civil penalties for non-compliance or criminal penalties for more serious breaches, depending on the nature and severity of the infringement. The specific penalties would be determined according to the provisions of the Customs Act 1901 and any relevant regulations.