EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833964
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.
Teco Australia Pty Ltd applied for a TCO in respect of certain wind powered generators on 02 October 2008.
Instrument
TCO No 0833964 was made on 19 December 2008. It declares that those certain wind powered 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. 0833964 is taken to have come into force on 02 October 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, provides a framework for the administration of customs and excise through the imposition of tariffs and duties on imported goods. To address the issue of ensuring that the Australian market is not disadvantaged by the imposition of duties on imported goods that do not have Australian alternatives, Part XVA of the Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0833964 was introduced to grant tariff concessions for specific wind-powered generators, thereby facilitating their importation at a reduced duty rate. The policy objective is to ensure that Australian consumers and businesses can access competitively priced goods that do not have locally produced equivalents, thus supporting economic efficiency and consumer choice within the Australian market.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. This legislative provision allows for the application of tariff concessions to goods not specified in section 269SJ of the Act, provided the application meets the core criteria outlined in section 269C. The application process requires the CEO to determine whether no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, with definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" provided in sections 269D, 269E, and 269B respectively. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, specifying the reduced duty rate applicable to the goods in question. The process also mandates the CEO to publish a notice in the Gazette inviting submissions from interested parties, although in the case of TECO No. 0833964, no submissions were received. The commencement date of the TCO is the day the application was lodged, with no retroactive effect on the rights or liabilities of any person, except to the beneficial effect of importers who may apply for a refund of duty under the Regulations.
Key Provisions
The Customs Act 1901 (the Act) provides a mechanism through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO) to lower the customs duty rate on certain goods. Specifically, section 269F allows for applications to be made to the CEO for a TCO, while section 269C outlines the core criteria that such an application must meet to be approved. These criteria include the condition that no substitutable goods were produced in Australia on the day the application was lodged, as defined in section 269D of the Act. The CEO must make a written order if satisfied that these criteria are met, as per section 269P(3).
The obligations under the Act for parties involved in the TCO process are clear and structured. Firstly, an applicant must submit an application to the CEO for a TCO, ensuring that it is not for goods specified in section 269SJ of the Act. The CEO, upon receiving a valid application, must then decide if the application meets the core criteria, including consulting with relevant stakeholders and publishing a notice in the Gazette inviting submissions from interested parties, as mandated by section 269K(1). If the CEO is satisfied that the application meets the criteria, they must make a TCO, which will come into effect on the day the application was lodged, as specified in section 269S(1).
Breaches of the provisions under the Customs Act 1901 can result in significant penalties. Although the explanatory statement does not specify detailed offences or penalties for non-compliance with TCOs, it is reasonable to infer that violations of customs regulations generally can lead to both civil and criminal consequences. Typically, the Act includes provisions for fines and imprisonment for serious breaches, reflecting the serious nature of customs law. The specifics of penalties would be determined based on the nature and severity of the breach, with the potential for significant financial penalties and imprisonment for more severe infractions. The precise penalties are detailed in other sections of the Customs Act and associated regulations.