EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1005230
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.
Hydac Pty Ltd applied for a TCO in respect of certain hydraulic pressure cylinders on 29 January 2010.
Instrument
TCO No 1005230 was made on 23 April 2010. It declares that those certain hydraulic pressure cylinders 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. 1005230 is taken to have come into force on 29 January 2010.
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. 1005230 was enacted in 2010 under the Customs Act 1901, addressing the need for tariff concessions to promote fair trade practices and economic efficiency. The instrument was introduced to provide relief to Australian importers by reducing customs duty rates on certain goods, in this case, hydraulic pressure cylinders, where no substitutable goods were produced domestically. The instrument was enacted by the Chief Executive Officer of Customs following a valid application by Hydac Pty Ltd, ensuring that the core criteria were met as stipulated under the Act. The policy objective behind this concession is to encourage the importation of goods that are not produced locally, thereby benefiting consumers and businesses by reducing costs and potentially increasing competition in the market. This approach aligns with broader economic policies aimed at enhancing trade efficiency and consumer welfare.
Scope and Application
The Tariff Concession Instrument No. 1005230 under the Customs Act 1901 applies to any person who has applied for and is granted a Tariff Concession Order (TCO) for specific goods, in this case, certain hydraulic pressure cylinders. The act allows for a lower rate of customs duty on goods that are subject to a TCO if certain criteria are met, such as the absence of substitutable goods produced in Australia at the time of application. The geographical reach of the Act is national, as it pertains to the Commonwealth of Australia and its customs regulations. However, it specifically excludes goods that are listed in section 269SJ of the Act, which are not eligible for a TCO. The Instrument extends the application of the Act by specifying the particular goods that are subject to the tariff concession, which in this instance are the hydraulic pressure cylinders declared to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO took effect from the date the application was lodged, which was 29 January 2010, and did not disadvantage any person's rights prior to that date.
Key Provisions
The primary operative sections of this legislation, specifically the Tariff Concession Instrument No. 1005230, revolve around the creation and implementation of Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. This section allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. A TCO is a written order that declares certain goods are subject to a lower rate of customs duty as specified in the Customs Tariff Act 1995. The CEO must consider an application for a TCO only if it does not pertain to goods listed in section 269SJ of the Act, which are ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria, outlined in sections 269C, 269B, and 269D of the Act, a TCO is issued.
The obligations and requirements imposed by this Act on the parties involved, particularly the CEO, are significant. Once an application for a TCO is accepted as valid, the CEO must publish a notice in the Gazette, as stipulated in subsection 269K(1) of the Act. This notice invites any person who believes there are reasons against the TCO to lodge a submission. In this particular case, no submissions were received. The CEO is also obligated to ensure that the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breaches of this legislation. However, the general implication is that failure to comply with the terms of a TCO or the application process could result in non-compliance with customs regulations, which may attract penalties under the broader Customs Act 1901. The penalties for breaches of the Customs Act can include fines, imprisonment, or both, depending on the nature and severity of the breach. The exact penalties would be determined based on the specific provisions of the Customs Act and any applicable regulations.