EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934203
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 applied for a TCO in respect of balises on 14 September 2009.
Instrument
TCO No 0934203 was made on 11 February 2010. It declares that those certain balises 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. One submission objecting to the TCO application was received from Ansaldo Sts Australia Pty Ltd.
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. 0934203 is taken to have come into force on 14 September 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. 0934203 was enacted under the Customs Act 1901, addressing the need for tariff concessions on specific goods to facilitate trade and economic efficiency. The instrument was introduced to allow the Chief Executive Officer of Customs to grant tariff concessions on goods not produced in Australia, thereby reducing customs duty and encouraging importation. Enacted by the relevant legislature, the policy objective of this instrument is to provide tariff relief for goods that have no domestic substitutes, thus supporting trade and potentially lowering costs for importers. This legislative measure ensures that the importation of certain goods can occur without the burden of customs duty, provided that no equivalent goods are produced locally.
Scope and Application
The Customs Act 1901, specifically Part XVA, allows for Tariff Concession Orders (TCOs) which can lower the rate of customs duty on certain goods. These orders are made by the Chief Executive Officer of Customs (CEO) following an application by a person or entity, provided that the goods in question are not specified in section 269SJ of the Act as ineligible for concession and meet the core criteria outlined in section 269C. A key condition for meeting these criteria is that no substitutable goods are produced in Australia at the time the application is made. The CEO must also consider submissions from any parties that may object to the application. Once a TCO is made, it applies from the date the application was lodged, and it does not affect the rights of any person other than the Commonwealth, particularly ensuring that no new liabilities are imposed on importers or others. The TCO may, however, entitle importers to a refund of duty paid on goods imported since the effective date of the order.
Key Provisions
The main operative sections of the Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0934203, include sections 269C, 269F, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application meets the core criteria specified in section 269C, which includes the condition that no substitutable goods were produced in Australia at the time of the application, the CEO must issue a TCO. Section 269P(3) mandates that the CEO must then make a written order, declaring the goods to which the TCO applies. In this case, TCO No. 0934203 was issued on 11 February 2010, declaring that certain balises are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO is obligated to assess whether the application for a TCO meets the core criteria, including ensuring that no substitutable goods were produced in Australia at the time of application. The CEO must also publish a notice in the Gazette inviting any objections to the TCO application. Furthermore, the CEO must make the TCO if the application is deemed to meet the core criteria. Importers, on the other hand, benefit from the ability to apply for a refund of duty on goods imported since the date the TCO is considered to have come into force.
Breach of the provisions outlined in the Act can lead to various consequences. While the explanatory statement does not explicitly mention specific penalties for breaches, the Customs Act generally includes provisions for both civil and criminal penalties for non-compliance. These penalties can include fines and, in some cases, imprisonment. The exact penalties would depend on the specific nature of the breach and could be outlined in related legislation or regulations.
In summary, the Tariff Concession Instrument No. 0934203 under the Customs Act 1901 allows for the reduction of customs duty on certain goods, provided they meet specific criteria and no substitutable goods are produced in Australia. The CEO has the duty to assess applications and issue TCOs as necessary, while importers benefit from potential duty refunds. Non-compliance with the Act’s provisions can result in significant penalties.