EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936289
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.
Papst A&NZ Pty Ltd applied for a TCO in respect of certain asynchronous ac motors on 25 September 2009.
Instrument
TCO No 0936289 was made on 11 December 2009. It declares that those certain asynchronous ac motors 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 10%. 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. 0936289 is taken to have come into force on 25 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 Customs Act 1901, enacted by the Commonwealth Parliament, serves as the principal legislation governing customs and border control in Australia. Among its provisions, Part XVA introduces the scheme for Tariff Concession Orders (TCOs), which allows the Chief Executive Officer of Customs to apply a lower rate of customs duty to certain goods, provided specific criteria are met. This legislative framework aims to facilitate trade by reducing the cost of importing goods, thereby encouraging economic activity and international trade. The Tariff Concession Instrument No. 0936289, issued under this Act, specifically addresses the application by Papst A&NZ Pty Ltd for a TCO on certain asynchronous ac motors. The instrument declares that these motors are subject to a zero rate of duty as no substitutable goods were produced in Australia, thereby benefiting importers by potentially reducing their duty liabilities and providing them with the opportunity to claim refunds for duties paid prior to the TCO’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0936289, established under the Customs Act 1901, applies to individuals and entities involved in the importation of certain asynchronous ac motors into Australia. The Act allows for tariff concession orders (TCOs) to be issued by the Chief Executive Officer of Customs, which result in a lower rate of customs duty for the specified goods. This concession is contingent upon the application meeting the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia at the time of the application. The TCO extends to the entire Commonwealth of Australia, impacting importers who may benefit from a refund of duties paid on the goods imported since the TCO was taken to have come into force on 25 September 2009. The instrument does not disadvantage any person or impose liabilities for actions taken prior to the TCO's effective date, thereby safeguarding the rights of importers.
Key Provisions
The Customs Act 1901 (the Act) allows for Tariff Concession Orders (TCOs) under Part XVA, which are intended to lower the customs duty on specified goods. Section 269F enables individuals to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning goods, provided they do not fall under the restrictions outlined in section 269SJ. If the CEO determines that the application meets the core criteria specified in section 269C, a TCO will be issued. This core criterion mandates that, at the time of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. The CEO must issue a written order (a TCO) if satisfied that the application meets these criteria, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)).
The obligations imposed by the Act on the parties involved include ensuring that the goods for which a TCO is sought do not have substitutable equivalents produced domestically. The CEO is obligated to publish a notice in the Gazette after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). The CEO must also determine whether the application meets the core criteria and issue a written order if satisfied (section 269P(3)). The TCO's commencement date is the day the application is lodged, as stipulated by subsection 269S(1). The rights of the Commonwealth are preserved, and no disadvantages or liabilities are imposed on individuals other than the Commonwealth due to the TCO (subsection 269S(1)).
In terms of penalties and consequences, the Act does not explicitly state penalties for breaches related to TCO applications. However, any breach of the Act or associated regulations could potentially lead to legal action, fines, or other civil or criminal consequences as outlined in the broader legislative framework. The specific maximum penalties for such breaches would be determined by the relevant sections of the Customs Act 1901 and other applicable laws. The Act ensures that the rights of importers will be beneficially affected by the TCO, including the ability to apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).