EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918490
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.
Siemens Ltd applied for a TCO in respect of certain electrical protection and distribution systems on 1 June 2009.
Instrument
TCO No 0918490 was made on 29 October 2009. It declares that those certain electrical protection and distribution systems 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. 0918490 is taken to have come into force on 1 June 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, provides a framework for the administration of customs duties and the regulation of imports and exports. One significant aspect of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs to reduce or eliminate customs duty on specific goods. This mechanism was introduced to address the need for flexibility in customs duty rates to promote trade and economic efficiency. The problem it aims to resolve includes ensuring that Australia can offer competitive terms for certain imports, particularly when no domestic alternatives are available, thereby supporting industries and consumers. The policy objective behind TCOs is to facilitate smoother trade flows by reducing the cost of importing certain goods, ultimately benefiting both businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0918490, made under the Customs Act 1901, pertains to the application and implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation specifically applies to goods that are subject to TCO applications, where a lower rate of customs duty is applicable. It is pertinent to note that the TCO applies to the goods specified in the application, provided that these goods are not listed in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The Act applies to any person or entity that lodges an application for a TCO in respect of goods, ensuring that the application meets the core criteria as outlined in section 269C. The instrument extends its application nationally, as it falls under the Commonwealth’s jurisdiction. There are no exclusions or exemptions specified in this particular TCO, and the application does not impose any liabilities on any person other than the Commonwealth. The commencement of this TCO is effective from the date the application was lodged, in this case, 1 June 2009.
Key Provisions
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) which apply lower rates of customs duty to specified goods. When an application for a TCO is submitted, the CEO must first ensure that the goods are not specified in section 269SJ, which lists items ineligible for TCOs. If the goods pass this preliminary check, the CEO then assesses whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively.
Once the CEO is satisfied that the application meets the core criteria, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. This legal process ensures that the TCO is formally recorded and enforceable. For instance, in the case of Siemens Ltd, a TCO was issued on 29 October 2009 for certain electrical protection and distribution systems, specifying that these goods are subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations on both applicants and the CEO. Applicants must ensure their submissions are valid and meet the criteria set out in the Act. The CEO, on the other hand, has the responsibility of verifying the application, consulting with relevant stakeholders by publishing a notice in the Gazette, and deciding whether to issue a TCO based on the core criteria. In the case of Siemens Ltd, the CEO did not receive any submissions opposing the TCO, indicating a smooth process from application to issuance.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. The Act does not explicitly state penalties for non-compliance, but breaches of the Act can potentially lead to civil or criminal actions, depending on the nature and severity of the breach. The exact penalties would be determined in the context of the specific breach and under other relevant laws. However, the Act ensures that the rights of individuals are protected, particularly in terms of not being disadvantaged or having liabilities imposed retroactively for actions taken before the TCO was issued.