EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0412370
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.
Basslink Pty Ltd applied for a TCO in respect of certain earth switches on 18 November 2004.
Instrument
TCO No 0412370 was made on 1 February 2005. It declares that those certain earth switches 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 3%.
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. 0412370 is taken to have come into force on 18 November 2004.
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. 0412370 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was introduced to facilitate the reduction of customs duty on certain earth switches, as applied for by Basslink Pty Ltd on 18 November 2004. The instrument was made on 1 February 2005, declaring that these particular earth switches are subject to a lower rate of customs duty, specifically 3%, down from the general rate of 5%. The policy objective behind this concession is to support the importation of goods that are not produced domestically, thereby encouraging trade and benefiting importers who can now apply for duty refunds on goods imported since the effective date of the concession, which is 18 November 2004.
Scope and Application
The Tariff Concession Instrument No. 0412370 under the Customs Act 1901 applies to Basslink Pty Ltd and specifically concerns certain earth switches that were subject to a Tariff Concession Order (TCO). This instrument is relevant to entities that import goods which may qualify for tariff concessions and is applicable nationally as it is part of the Commonwealth’s legislative framework. The Act mandates that the Chief Executive Officer of Customs must consider applications for TCOs, which are granted when the imported goods have no substitutable Australian-produced alternatives. The concessions provided by this specific TCO reduce the customs duty rate on the specified earth switches from the general rate of 5% to a reduced rate of 3%, effective from the date the application was lodged, 18 November 2004. The scope of the Act is limited to goods specified in the application and does not extend to those prohibited by section 269SJ of the Customs Act 1901. The legislation does not specify exclusions beyond those inherently defined in the Act but allows for the possibility of further regulations or amendments through subordinate instruments.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269SJ. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which specifies goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria set out in section 269C. This section stipulates that an application meets the core criteria if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they are required under section 269P to issue a written order, a TCO, which declares the specified goods subject to a reduced rate of customs duty.
The Act imposes specific obligations and requirements on the parties involved in the TCO process. Firstly, applicants must ensure that their applications comply with the criteria set out in the Act, particularly that the goods in question are not among those ineligible for a TCO under section 269SJ. The CEO has the responsibility to review the application and verify that it meets the core criteria. If satisfied, the CEO must make a TCO as per section 269P. Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not proceed. In the case of TCO No. 0412370, the CEO did not receive any objections following the publication.
In terms of consequences for breach, the Act does not explicitly detail specific offences or penalties for non-compliance with the TCO process. However, if the CEO makes a TCO in error or if an entity submits an application knowing it does not meet the core criteria, this could potentially lead to legal challenges or administrative reviews. The primary civil consequence for an entity benefiting from a TCO made in error would be the requirement to repay any improperly received tariff concessions. Additionally, there may be reputational damage or the need to rectify past actions, although these are not explicitly defined in the Act. The Act ensures that the rights of third parties are not adversely affected by the issuance of a TCO, and it does not impose any new liabilities on individuals or entities for actions taken prior to the TCO's effective date.