EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0921130
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.
Linak Australia Pty Ltd applied for a TCO in respect of certain electric actuator spindles on 22 June 2009.
Instrument
TCO No 0921130 was made on 11 September 2009. It declares that those certain electric actuator spindles 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. 0921130 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0921130 was introduced under the Customs Act 1901 to provide a lower rate of customs duty for certain electric actuator spindles, specifically those produced by Linak Australia Pty Ltd. Enacted by the Parliament of Australia, this instrument aims to facilitate smoother trade operations by reducing the financial burden on importers of these specific goods, thereby encouraging their use and availability within the Australian market. The Tariff Concession Order (TCO) was made on 11 September 2009, effective from 22 June 2009, the date the application was lodged, and was based on the Chief Executive Officer of Customs' determination that no substitutable goods were being produced in Australia at the time of application. This measure was introduced to ensure that Australian businesses are not at a competitive disadvantage when importing these particular goods, aligning with the overarching policy objective of promoting fair and efficient trade practices.
Scope and Application
The Customs Act 1901, under Part XVA, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specific goods. This process is initiated by an application under section 269F of the Act, provided the goods do not fall under the exclusions listed in section 269SJ. The CEO must ensure that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E, before approving the TCO application. Once the core criteria are met, a written order is issued under section 269P(3), effectively applying the concession. For instance, in the case of TCO No. 0921130, certain electric actuator spindles received a tariff concession, reducing their duty rate from 5% to free. The CEO must also consult by publishing a notice in the Gazette, inviting objections to the TCO application, though in this case, no submissions were received. The TCO comes into force on the date the application is lodged, offering benefits such as duty refunds to importers of the specified goods without imposing new liabilities on any person.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0921130, as referenced in the Customs Act 1901, primarily involve the application and approval process for a Tariff Concession Order (TCO) (sections 269C, 269F, 269K, 269P). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the application meets the core criteria specified in section 269C, the CEO must make a written order declaring that the goods are subject to a TCO. In this case, section 269P(3) mandates that the CEO must declare the goods as those to which a specific item of Schedule 4 to the Customs Tariff Act 1995 applies. The order specifies that certain electric actuator spindles are subject to item 50 of Schedule 4, with the rate of duty for these goods set at free, instead of the general rate of 5%.
The obligations and requirements imposed by the Act on the parties and entities it governs include the necessity for the CEO to evaluate whether an application for a TCO meets the core criteria (section 269C). Specifically, the CEO must determine that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must consider any submissions received and decide whether to proceed with the order based on the merits of the application and any submissions received.
The legislation also outlines the consequences of a breach, although the Explanatory Statement does not detail specific offences or penalties for non-compliance with the TCO provisions. Typically, under the Customs Act, failure to comply with the provisions of a TCO, or other customs regulations, could result in various civil or criminal penalties. These may include fines, imprisonment, or both, depending on the severity of the breach and any applicable provisions within the Customs Act or associated regulations. The maximum penalties can vary significantly depending on the specific breach and the jurisdiction in which it occurs.
In summary, the Tariff Concession Order No. 0921130 provides a reduced duty rate for certain electric actuator spindles, contingent on the CEO's determination that no substitutable goods are produced in Australia. The process involves a thorough evaluation of the application against specified criteria and publication of a notice in the Gazette to allow for public submissions. While the legislation does not specify exact penalties for non-compliance, breaches of customs regulations generally carry significant civil and criminal consequences.