EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929839
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.
Powersense Pty Ltd applied for a TCO in respect of certain low voltage current transformers on 14 August 2009.
Instrument
TCO No 0929839 was made on 06 November 2009. It declares that those certain low voltage current transformers 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. 0929838 is taken to have come into force on 14 August 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 and excise through the establishment of a comprehensive tariff system. To address gaps in the economic efficiency and competitiveness of certain imported goods, the Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA. These orders are designed to lower customs duty rates on specific goods, provided that they do not have substitutable alternatives produced in Australia. The Tariff Concession Instrument No. 0929839 was introduced on 6 November 2009, following an application by Powersense Pty Ltd for a concession on certain low voltage current transformers. The policy objective of this instrument is to enhance economic efficiency by ensuring that the importation of these goods is not hindered by prohibitive duty rates, thereby benefiting importers who can now apply for refunds on duties paid since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on specific goods for import into Australia. The scope of the Act includes the process of applying for Tariff Concession Orders (TCO) through the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria for a TCO. This Act applies to goods that are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The geographic reach of this legislation is national, extending across the Commonwealth of Australia. The Act includes provisions for exclusions, particularly for goods that are already produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. The Act’s application may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applied to goods under a TCO. For example, TCO No. 0929839 applies to certain low voltage current transformers, reducing the duty rate from 5% to free under the Customs Tariff. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, and it allows for the refund of duties for importers of goods since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901, relevant to the Tariff Concession Order (TCO) in question, include sections 269C, 269F, and 269P. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application is deemed valid, the CEO must then determine whether it meets the core criteria set out in section 269C. This involves assessing whether there are no substitutable goods produced in Australia at the time the application was lodged. If the CEO is satisfied that these criteria are met, a written order is made under section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act imposes several obligations on parties involved in the TCO process. Firstly, any person who wishes to apply for a TCO must ensure that the goods in question are not prohibited by section 269SJ. The CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit objections if they believe the TCO should not be granted. In this case, no objections were received. Additionally, the CEO is required to make a decision on the application within the stipulated timeframe, considering whether the goods meet the core criteria set out in section 269C. Should the CEO determine that the application meets these criteria, a formal TCO is issued.
Failure to comply with the provisions of the Customs Act can lead to various consequences. While specific offences and penalties are not detailed in the provided text, breaches of the Act could generally result in civil or criminal penalties. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the nature and severity of the breach. The maximum penalties would be determined by the courts based on the specific circumstances of each case. The Act ensures that the rights of persons other than the Commonwealth are protected, and the TCO does not impose any liabilities on any person for actions taken prior to the registration date.
In summary, the Tariff Concession Order (TCO) process under the Customs Act 1901 involves a series of checks and balances to ensure that only eligible goods are granted a tariff concession. The CEO must assess applications against specific criteria and publish notices inviting objections. While the Act provides for civil and criminal penalties for non-compliance, the specific penalties are not outlined in the provided text, leaving the exact consequences to be determined by judicial interpretation in individual cases.