EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905599
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.
Nord Drivesystems Australia applied for a TCO in respect of certain hydraulic press on 18 February 2009.
Instrument
TCO No 0905599 was made on 15 May 2009. It declares that those certain hydraulic press 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. 0905599 is taken to have come into force on 18 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 Parliament of Australia, facilitates a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation was introduced to address the need for facilitating trade by reducing customs duty on specific goods, provided that no substitutable goods are produced in Australia. TCO No. 0905599, made on 15 May 2009, is an instance of such an order, providing Nord Drivesystems Australia with a concession for certain hydraulic presses. The policy objective behind this concession is to support the competitiveness of Australian businesses in the international market by lowering the cost of imported goods that have no Australian-made equivalents, thereby encouraging trade and economic growth. The CEO of Customs did not receive any submissions opposing the concession, indicating broad acceptance of the measure within the industry.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to applications made by individuals or entities seeking a tariff concession for specific goods, provided these goods are not excluded under section 269SJ of the Act. The legislation mandates that a TCO application can be granted if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. This concession results in a reduction or exemption from the general customs duty rate. The geographical and jurisdictional reach of this Act is national, applying across all states and territories of Australia. The Act also specifies that no liabilities are imposed on any person, including the Commonwealth, and does not disadvantage any person's rights as they stood at the date of the TCO's registration. Subordinate instruments can further extend or restrict the application of this Act, providing additional clarity and specificity to the TCO process.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0905599 under the Customs Act 1901 (the Act) are primarily concerned with the establishment and application of Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods, provided they are not prohibited by section 269SJ. The core criteria for approving such an application are outlined in section 269C, which mandates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) specifies that if the CEO determines the application meets these criteria, they must issue a written order (the TCO), which declares the applicable tariff for the goods as specified in Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved include ensuring that the application for a TCO is valid and that it complies with the stipulations of section 269C. The CEO is required to publish a notice in the Gazette under subsection 269K(1) as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit any objections. Additionally, the CEO must consider any submissions received and make a decision on whether to issue the TCO. The rights of importers are also protected under this legislation, as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations.
In terms of the penalties and consequences for breach, the Act does not explicitly detail the penalties for non-compliance with the TCO provisions. However, failure to adhere to the requirements and obligations outlined in the Act may lead to legal repercussions, as any non-compliant actions could result in disputes or claims under the Customs Act. Additionally, if the CEO does not follow the statutory requirements for publishing notices and considering submissions, this could potentially lead to judicial review or other legal challenges, although the specific penalties are not detailed within this legislation.