EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905015
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.
M & H Power Systems applied for a TCO in respect of certain ac alternators on 13 February 2009.
Instrument
TCO No 0905015 was made on 08 May 2009. It declares that those certain ac alternators 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. 0905015 is taken to have come into force on 13 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. 0905015, enacted in 2009, amends the Customs Act 1901 by providing tariff concessions on certain ac alternators, effectively granting them a reduced rate of customs duty. This instrument addresses the gap in the tariff system by offering relief to importers of these specific goods, ensuring they are not subjected to the standard duty rates applicable to similar products. Enacted by the Chief Executive Officer of Customs, this instrument aims to facilitate trade by reducing the financial burden on importers and potentially increasing the competitiveness of these goods in the Australian market. The policy objective aligns with broader economic goals of promoting fair trade practices and supporting industry competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0905015 under the Customs Act 1901 applies to any entity or person who imports certain ac alternators into Australia, providing them with a concessional rate of customs duty. The Act applies to goods that are subject to Tariff Concession Orders (TCOs), which are made by the Chief Executive Officer of Customs if specific criteria are met, such as the absence of substitutable goods produced in Australia. The instrument specifically pertains to ac alternators, which, under the general customs tariff, attract a duty rate of 5%, but benefit from a free rate under this TCO. This concession is effective from the date the application was lodged, which in this case was 13 February 2009, and does not retroactively affect any pre-existing rights or impose new liabilities on entities other than the Commonwealth. Importantly, the instrument does not impact the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P requires the CEO to make a written order (a TCO) if satisfied that the application meets the core criteria. Section 269SJ specifies the goods that cannot be subject to a TCO.
The Act imposes several obligations and requirements on the parties involved. For instance, any person wishing to apply for a TCO must ensure their application complies with the criteria set out in section 269C. The CEO, upon receiving an application, must determine whether it meets the core criteria and publish a notice in the Gazette, inviting submissions from any interested parties. If no submissions are received, the CEO proceeds to make the TCO. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO’s effective date.
The legislation outlines specific consequences and penalties for breaches. While the explanatory statement does not explicitly detail penalties, it is reasonable to infer that any misuse or non-compliance with the Act’s provisions could lead to civil or criminal consequences. Typically, breaches of customs regulations in Australia can result in fines and, in severe cases, imprisonment. However, the precise penalties would depend on the nature and severity of the breach, and would be subject to the applicable laws governing customs and trade.
In summary, the Customs Act 1901, through sections 269C, 269F, 269P, and 269SJ, provides a framework for the application and issuance of TCOs, with specific criteria and obligations for both applicants and the CEO. The Act ensures that TCOs are made fairly and transparently, with appropriate safeguards to prevent misuse and ensure compliance with its provisions.