EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1005233
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.
Heiniger Australia Pty Ltd applied for a TCO in respect of certain shearing power source motors on 29 January 2010.
Instrument
TCO No 1005233 was made on 16 April 2010. It declares that those certain shearing power source 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 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. 1005233 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 Customs Act 1901, enacted by the Australian Parliament, provides the framework for the administration of customs and excise in Australia. To address the need for flexibility and responsiveness in customs duty rates, Part XVA of the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) in respect of certain goods. These TCOs can reduce or eliminate customs duty on specified goods, subject to certain conditions. The objective is to ensure that Australian industries can access necessary inputs at a reduced cost, thereby maintaining competitiveness and supporting economic growth. The Tariff Concession Instrument No. 1005233, made on 16 April 2010, is an example of this process, granting a tariff concession on certain shearing power source motors, reflecting the absence of substitutable goods produced in Australia. The instrument came into force on the date the application was lodged, 29 January 2010, and does not impose any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1005233, issued under the Customs Act 1901, applies to specific shearing power source motors, with the intent of providing a tariff concession by reducing the customs duty on these goods. This instrument was made by the Chief Executive Officer of Customs following an application by Heiniger Australia Pty Ltd on 29 January 2010. The Act applies to the goods specified in the TCO and the CEO’s decision is based on the core criteria that no substitutable goods were produced in Australia at the time of the application. The concession is geographically applicable within Australia and is in line with the Customs Act 1901 and the Customs Tariff Act 1995. The TCO does not impose any liabilities on persons other than the Commonwealth and does not affect any rights as at the date of registration. The instrument came into effect on 29 January 2010, and importers of these goods may apply for a refund of duty from that date.
Key Provisions
The Tariff Concession Order No. 1005233 under the Customs Act 1901 (the Act) introduces a lower rate of customs duty on certain shearing power source motors, effective from the date the application was lodged, 29 January 2010 (sections 269F, 269SJ, 269C, 269P(3)). This order is made after determining that no substitutable goods were produced in Australia in the ordinary course of business on the application date (section 269D, 269E). As a result, these motors are subject to a tariff of free duty, as opposed to the general rate of 5% (Schedule 4, item 50 of the Customs Tariff Act 1995).
The Act imposes several obligations on the parties involved. The Chief Executive Officer of Customs (CEO) must ensure that the application for a tariff concession order (TCO) does not pertain to goods specified in section 269SJ of the Act, which cannot be subject to a TCO (subsection 269K(1)). Upon receiving a valid TCO application, the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the written order. The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration to disadvantage that person or impose liabilities on them for actions taken before the registration date (subsection 269S(1)).
In terms of legal consequences, failure to comply with the obligations under the Act, such as submitting a valid application or adhering to the publication requirements, may result in the TCO not being granted. There are no specific criminal or civil penalties mentioned in the text for breaches of the Act in relation to TCO applications. However, the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.
The Act ensures that the TCO does not impose any liabilities on any person, protecting them from financial or legal repercussions related to the concession. This protection extends to ensuring that no person other than the Commonwealth is disadvantaged or burdened with liabilities due to the TCO. The provisions are designed to balance the interests of various stakeholders, providing relief to importers while maintaining the integrity of the customs duty system.