EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506576
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.
Cigweld Pty Ltd applied for a TCO in respect of certain power supplies on 01 June 2005.
Instrument
TCO No 0506576 was made on 07 October 2005. It declares that those certain power supplies 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. 0506576 is taken to have come into force on 01 June 2005.
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 was enacted to provide a comprehensive legal framework for the regulation of customs and excise duties in Australia. In addressing the need for a flexible and responsive mechanism to adjust customs duties on specific goods, the Customs Act 1901 incorporates a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislative instrument was introduced to provide relief from customs duties for certain goods, thereby facilitating trade and economic efficiency by ensuring that Australian consumers and businesses have access to competitively priced goods. The objective of the Tariff Concession Instrument No. 0506576, enacted by the Commonwealth Parliament, is to provide tariff concessions for particular power supplies, reducing the duty rate from the general 5% to free, thus benefiting importers and aligning with the policy of enhancing trade competitiveness.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is set out, provided that certain criteria are met. An application for a TCO can be made by any person, and the CEO is mandated to consider such applications, barring instances where the goods are specified in section 269SJ of the Act, which lists goods ineligible for a TCO. For an application to be successful, it must satisfy the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business, as defined under sections 269C, 269D, 269E, and 269F of the Act. The instrument extends to the Commonwealth jurisdiction, and the scope of its application is further defined and potentially expanded through subordinate instruments, such as regulations and further TCOs made under the Act. The instrument does not disadvantage any person, including importers, who may benefit from refunds of duty under the Customs Tariff Act 1995 and its associated regulations.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 0506576 under the Customs Act 1901, outline the process and criteria for making Tariff Concession Orders (TCOs) (sections 269C, 269B, 269D, 269E, and 269P). Specifically, section 269C requires that the application for a TCO must meet the core criteria, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if these criteria are satisfied, the Chief Executive Officer (CEO) of Customs must make a written order that specifies the reduced rate of duty applicable to the goods in question. This particular instrument, TCO No. 0506576, declares that certain power supplies are subject to a 0% duty rate as of 1 June 2005, the date the application was lodged.
The Act imposes several obligations on the parties involved. Primarily, it requires that the CEO of Customs must evaluate applications for TCOs against the core criteria established by section 269C, ensuring that no substitutable goods were produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might oppose the granting of a TCO (subsection 269K(1)). If no submissions are received, as was the case with this application, the CEO can proceed to make the order. Additionally, section 269S(1) stipulates that the TCO is considered to have come into force on the date the application was lodged, which in this case was 1 June 2005.
The legislation does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, it does clarify that a TCO does not affect the rights of any person as at the date of registration, ensuring that no one is disadvantaged or imposed liabilities for actions taken before the TCO was registered. This means that while the rights of importers will be positively affected, allowing them to apply for duty refunds for goods imported since the TCO's effective date, no punitive measures are imposed on individuals or entities for non-compliance.