EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136059
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.
Mitsubishi Electric Australia applied for a TCO in respect of certain transformers on 27 October 2011.
Instrument
TCO No 1136059 was made on 16 January 2012. It declares that those certain transformers 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. 1136059 is taken to have come into force on 27 October 2011.
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 the administration of customs and excise in Australia, including the ability to grant tariff concessions for certain goods. Specifically, the Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty for goods that meet specific criteria. The explanatory statement for Tariff Concession Instrument No. 1136059, made under this Act, addresses a particular application by Mitsubishi Electric Australia for tariff concessions on certain transformers. The policy objective here is to facilitate the importation of these goods at a reduced duty rate, provided that no substitutable goods are produced in Australia, thereby supporting the availability and affordability of these items in the Australian market. The instrument was made on 16 January 2012, effective from 27 October 2011, and does not adversely affect any rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1136059 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been granted, such as the certain transformers for which Mitsubishi Electric Australia applied. This legislation allows for the application of a lower rate of customs duty on these goods, provided they meet the core criteria specified in the Act. The Act applies to any person who may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, and it is operational on a Commonwealth level. The Act provides exclusions where goods specified in section 269SJ cannot be subject to a TCO, such as certain firearms or tobacco products. The scope of the Act can be extended or restricted through subordinate instruments, though this particular TCO does not impose any new liabilities or disadvantage any person’s rights as at the date of registration. Instead, it potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1136059 (F2012L00652) pertain to the process and conditions under which Tariff Concession Orders (TCOs) can be made. Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specified goods. If the CEO determines that the application does not involve goods prohibited by section 269SJ and that it meets the core criteria set out in section 269C, they must make a written order (a TCO). This order, as specified in section 269P(3), declares that the goods subject to the TCO application are eligible for a prescribed rate of duty, as outlined in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes specific obligations on the CEO when processing a TCO application. According to section 269K(1), the CEO must publish a notice in the Gazette after accepting an application as valid, inviting any person who believes the TCO should not be made to submit their reasons. This ensures transparency and allows for potential objections to be considered. In this case, no submissions were received by the CEO in response to the notice. Additionally, under section 269S(1), a TCO is deemed to come into effect on the day the application was lodged, meaning TCO No. 1136059 took effect on 27 October 2011, the date Mitsubishi Electric Australia applied for the concession.
Breaches of the conditions or obligations under the Customs Act 1901 can lead to various penalties and consequences. Although the explanatory statement does not detail specific offences or penalties, the Customs Act generally includes provisions for both civil and criminal penalties for non-compliance with its requirements. For example, knowingly making a false statement in an application for a TCO or providing false information could potentially result in fines or imprisonment, as outlined in other sections of the Customs Act. The penalties would depend on the nature and severity of the breach, but they can include substantial fines and imprisonment terms as specified in the broader legislative framework.