EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905018
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 single phase ac alternators on 13 February 2009.
Instrument
TCO No 0905018 was made on 08 May 2009. It declares that those certain single phase 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. 0905018 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties, including the possibility of tariff concession orders (TCOs) which offer reduced customs duty rates on specified goods. The Tariff Concession Instrument No. 0905018, made under the authority of this Act, aims to address the gap in the availability of certain goods by granting tariff concessions that can lower the customs duty rate, thereby making these goods more accessible and affordable. The policy objective of this specific instrument, which was made on 8 May 2009, is to provide a concession on the customs duty for certain single phase AC alternators, facilitating their importation at a reduced duty rate of 0% instead of the general rate of 5%. The instrument was introduced following an application by M & H Power Systems, and the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia at the time of application.
Scope and Application
The Customs Act 1901 applies to the process of applying for Tariff Concession Orders (TCOs) in respect of certain goods, allowing for lower rates of customs duty under specific conditions. The Act specifically applies to entities or individuals seeking tariff concessions for goods not produced in Australia in the ordinary course of business. The legislation provides that the CEO of Customs must consider applications and make a TCO if certain criteria are met, such as the absence of substitutable goods produced domestically. The geographic and jurisdictional reach of this Act is national, as it pertains to customs duties across Australia. The Act does not impose liabilities on persons other than the Commonwealth and does not disadvantage existing rights as of the date of registration. The scope of the Act can be extended through subordinate instruments, allowing for detailed regulations and conditions governing the application and implementation of TCOs.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) (s 269F). When an application is submitted under this section, the CEO assesses whether it meets the core criteria, particularly focusing on whether substitutable goods are produced in Australia in the ordinary course of business (s 269C, s 269D, s 269E). If the application meets these criteria, the CEO must make a written TCO order, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
In this instance, TCO No. 0905018 was issued on 8 May 2009, declaring that certain single-phase AC alternators are subject to a zero percent duty rate, which contrasts with the general duty rate of 5% (s 269P(3)). The CEO must also publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not proceed (s 269K(1)). No submissions were received for this particular TCO, leading to its issuance. The TCO is deemed to have come into force on the date the application was lodged, which was 13 February 2009 (s 269S(1)).
The obligations imposed by the Act on parties include the requirement for applicants to ensure their applications meet the specified core criteria, particularly concerning the production of substitutable goods in Australia (s 269C). The CEO has the obligation to assess the application and make a decision based on the criteria, as well as to publish notices in the Gazette to allow for public submissions (s 269K(1)). Importers, as beneficiaries of the TCO, have the right to apply for a refund of duty on goods imported since the effective date of the TCO (Reg. 126(1)(r)).
Breaches of the provisions in the Customs Act 1901 can result in various consequences. While specific penalties are not detailed in the provided text, the Act generally allows for both civil and criminal penalties for non-compliance. These penalties can include fines and imprisonment, depending on the severity and nature of the breach. The exact penalties are typically outlined in other sections of the Act and related regulations, which provide detailed information on enforcement actions and sanctions for violations.