EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903764
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.
Nhp Electrical Engineering Products applied for a TCO in respect of certain thermal overload relays on 05 February 2009.
Instrument
TCO No 0903764 was made on 01 May 2009. It declares that those certain thermal overload relays 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. 0903764 is taken to have come into force on 05 February 2009.
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. 0903764, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific imported goods, thereby encouraging trade and reducing the cost of imports for certain items. This instrument was introduced to facilitate the process through which applications for tariff concessions can be assessed and granted by the Chief Executive Officer of Customs. The Act, overseen by the Parliament of Australia, aims to streamline the application process for tariff reductions, ensuring that eligible goods benefit from lower customs duties when no suitable domestic alternatives exist. This legislative measure was introduced to foster economic efficiency by allowing the importation of goods at a reduced duty rate, which in turn supports businesses and consumers by making certain products more affordable.
Scope and Application
The Tariff Concession Instrument No. 0903764, issued under the Customs Act 1901, applies to the concession of customs duty on certain thermal overload relays as applied by Nhp Electrical Engineering Products. The Act applies to any person or entity that imports goods which are the subject of a Tariff Concession Order (TCO), in this case, the specified thermal overload relays. The geographic reach of this legislation is national, governed under the Commonwealth jurisdiction, with the application extending to all importers of the specified goods within Australia. The Act stipulates exclusions for goods that cannot be subject to a TCO as outlined in section 269SJ, and the CEO must be satisfied that no substitutable goods were produced in Australia at the time of application. The CEO is mandated to make a written TCO if the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. The commencement of this TCO is deemed to be effective from the date the application was lodged, in this instance, 5 February 2009, with the TCO officially coming into force on 1 May 2009. The rights of importers will be advantageously affected, as they will be able to apply for a refund of duty on imported goods since the effective date of the TCO, with no imposition of liabilities on any person except the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0903764, made under section 269F of the Customs Act 1901, grants a tariff concession to certain thermal overload relays by setting their customs duty rate at free. This concession applies because the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were being produced in Australia at the time the application was made (sections 269C and 269P(3)). According to section 269D, 'goods produced in Australia' refers to goods manufactured within Australia, while 'ordinary course of business' (section 269E) denotes commercial production activities. 'Substitutable goods' (section 269B) are those that can serve the same function as the goods in question, which in this case are thermal overload relays. The CEO must ensure that the application meets the core criteria, specifically that no such Australian-made alternatives exist, before issuing a Tariff Concession Order (TCO).
The Act imposes several obligations on the parties involved. Firstly, applicants like Nhp Electrical Engineering Products must submit a valid application to the CEO, detailing the goods for which a tariff concession is sought. The CEO, upon receiving such an application, must assess it against the core criteria and, if satisfied, make a written TCO (section 269K(1)). The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections if they believe the concession should not be granted. In this case, no objections were received. Additionally, the Act requires that the TCO does not affect any pre-existing rights or impose new liabilities on any party other than the Commonwealth (subsection 269S(1)).
Under the Customs Act 1901, various offences and penalties may apply in the event of a breach. However, the specific provisions of this TCO do not outline any particular offences or penalties. Generally, violations of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. The maximum penalties can vary significantly based on the specific nature of the offence, but they are detailed in other sections of the Customs Act and related regulations. For this TCO, the primary focus is on ensuring compliance with the conditions set out for the tariff concession, rather than imposing penalties for breaches.