EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1026590
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.
Nsk Australia Pty Ltd applied for a TCO in respect of certain tapered roller bearings on 15 June 2010.
Instrument
TCO No 1026590 was made on 06 September 2010. It declares that those certain tapered roller bearings 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. 1026590 is taken to have come into force on 15 June 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, establishes a framework for imposing and collecting customs duties on imported goods, among other functions. The Act was introduced to regulate the import and export of goods, ensuring that duties are correctly applied and collected while facilitating legitimate trade. One of its components is Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This mechanism enables the application of lower rates of customs duty to specific goods, provided certain conditions are met. The Tariff Concession Instrument No. 1026590, made on 6 September 2010, is an example of this process, granting a concession to certain tapered roller bearings, reducing their duty rate from 5% to free, thereby addressing the need for tariff adjustments to support industry and trade.
Scope and Application
The Tariff Concession Instrument No. 1026590, made under the Customs Act 1901, applies to the goods known as certain tapered roller bearings, which are subject to the application made by Nsk Australia Pty Ltd on 15 June 2010. The instrument specifies that these goods are to be treated in accordance with item 50 of Schedule 4 of the Customs Tariff Act 1995, thereby providing them with a free rate of duty as opposed to the general rate of 5%. This Act operates within the Commonwealth jurisdiction and applies to any entities or individuals involved in the importation of these specific goods. The application of this instrument is limited to goods that are not specified in section 269SJ of the Customs Act 1901, which excludes certain goods from being subject to a Tariff Concession Order. The scope of the Act extends to all relevant goods imported into Australia, and it does not impose any liabilities on any person, including the rights of importers who may apply for a refund of duty on goods imported since the effective date of the Tariff Concession Order.
Key Provisions
The main operative sections of this legislation revolve around Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Specifically, section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods. If the application meets the core criteria, the CEO must then decide to either approve or reject the application (section 269C). For a TCO application to meet the core criteria, it is essential that, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must issue a written order (a TCO) which declares that the goods in question are subject to a prescribed rate of duty (section 269P(3)).
The obligations and requirements imposed by the Act on the parties involved are relatively straightforward. The CEO must first assess whether the application for a TCO is valid and whether it meets the core criteria outlined in section 269C of the Act. This includes ensuring that no substitutable goods are being produced in Australia. Once the CEO is satisfied that the application meets these criteria, they must make a TCO and publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received. Additionally, the Act requires that 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 any liabilities (subsection 269S(1)).
The legislation also delineates the consequences for non-compliance with the Act’s provisions. While the Act does not explicitly state penalties for breaches, the authority to impose penalties typically resides in other sections of the Customs Act 1901 or the associated regulations. Generally, penalties for breaches of customs laws can include substantial fines and, in some cases, imprisonment. The exact penalties would be determined based on the specific nature and severity of the breach, as outlined in the broader legislative framework. It is essential for entities and individuals subject to the Act to adhere to its provisions to avoid any adverse legal consequences.