EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903767
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 solid state overload protection relays on 05 February 2009.
Instrument
TCO No 0903767 was made on 01 May 2009. It declares that those certain solid state overload protection 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. 0903767 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. 0903767 was enacted under the Customs Act 1901 to provide a pathway for the reduction or elimination of customs duty on specific goods, addressing the gap in tariff relief for products that are not produced domestically and have no substitutable alternatives. The instrument was created to support businesses by lowering the cost of importing certain goods, thereby fostering economic efficiency and competitiveness. Enacted by the Chief Executive Officer of Customs, this instrument aims to meet the core criteria outlined in the Act, specifically ensuring that the goods in question are not produced in Australia and do not have substitutable alternatives. The policy objective is to facilitate the import of these goods at a reduced duty rate, benefiting importers who can now claim refunds on duties paid prior to the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on goods that meet certain criteria, notably those that are not substitutable by goods produced in Australia in the ordinary course of business. The Act applies to any person who can demonstrate that the goods in question are not substitutable by locally produced goods. The geographic scope of the Act is national, applying across all jurisdictions within Australia. The Act does not apply to goods specified in section 269SJ, which are ineligible for TCOs. Additionally, the CEO is required to publish notices in the Gazette to invite submissions from interested parties, although no submissions were received for TCO No. 0903767. The commencement date of a TCO is the date on which the application was lodged, and in this case, it was 05 February 2009. The TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0903767 include sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) application to be accepted. Specifically, this criterion requires that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, they must issue a written order, which constitutes the TCO (s 269P(3)). Section 269S specifies that the TCO is considered to come into effect on the day the application for the TCO was lodged (s 269S(1)).
The Act imposes several obligations on parties and entities it governs. Firstly, the CEO of Customs is obligated to assess TCO applications against the core criteria specified in section 269C. If the application meets these criteria, the CEO must issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1). The CEO must also ensure that the TCO does not adversely affect the rights of any person, as outlined in subsection 269S(2). Furthermore, importers of the goods subject to the TCO are granted the right to apply for a refund of duty on goods imported since the TCO came into effect, under paragraph 126(1)(r) of the Regulations.
There are no specific offences outlined in the explanatory statement for breach of the provisions of the TCO. However, any failure to comply with the terms of the TCO could potentially lead to civil or administrative consequences. For instance, if an entity imports goods subject to the TCO without adhering to the conditions, they could face penalties under the Customs Act 1901 or other related legislation. The exact nature and severity of these penalties would depend on the specific circumstances and the relevant legal provisions applicable at the time.