EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510931
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.
Olex Australia Pty Ltd applied for a TCO in respect of certain power cable joints on 26 August 2005.
Instrument
TCO No 0510931 was made on 18 November 2005. It declares that those certain power cable joints 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. 0510931 is taken to have come into force on 26 August 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 regulate the importation and exportation of goods within Australia, ensuring that appropriate duties and tariffs are applied. To address the need for flexible tariff arrangements that can support economic development and industry needs, the Customs Act was amended to include the provisions for Tariff Concession Orders (TCOs). This mechanism allows for the reduction or exemption of customs duty on specific goods under certain conditions, facilitating trade and supporting industry growth. The Tariff Concession Instrument No. 0510931 was introduced by the Chief Executive Officer of Customs, in line with the Act’s provisions, to provide tariff concessions for certain power cable joints, recognising that no substitutable goods were produced in Australia. The policy objective of this measure is to support the import of these goods by reducing their duty rate from 5% to free, thereby enhancing the competitiveness of the relevant industry within Australia.
Scope and Application
The Tariff Concession Instrument No. 0510931, made under the Customs Act 1901, applies to persons or entities seeking a tariff concession for goods imported into Australia. This legislation is concerned specifically with the application and approval process for Tariff Concession Orders (TCOs), which are designed to reduce the customs duty on certain imported goods. The Act applies to individuals or businesses that meet the criteria outlined in the Act, particularly those who apply for a TCO for goods not produced in Australia that could serve as a substitute. The instrument extends its reach across the Commonwealth of Australia, with the authority vested in the Chief Executive Officer of Customs, who is mandated to review and approve applications based on the criteria stipulated in the Act.
The scope of the Act includes the application of reduced customs duty rates for goods specified in the TCO, as long as these goods are not listed in section 269SJ, which excludes certain goods from tariff concessions. The Act specifies that a TCO application is valid if, on the date of application, there are no substitutable goods produced in Australia. This legislative instrument does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's effective date. Any exclusions or exemptions from the application of the TCO are clearly defined within the Act, and the TCO itself does not alter any existing rights or impose new liabilities. The commencement of the TCO aligns with the date the application was lodged, making the concessions effective from that date.
Key Provisions
The primary operative sections of this legislation revolve around Tariff Concession Orders (TCOs) as provided in Part XVA of the Customs Act 1901. Specifically, section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while section 269C stipulates that a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. This core criteria consideration is further defined in section 269P(3) of the Act, which mandates that if the CEO is satisfied with the application, they must issue a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. In this instance, TCO No. 0510931 declares that certain power cable joints are subject to item 50 of Schedule 4, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes certain obligations on the CEO when handling TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who may have reasons against the TCO being made. This ensures a level of transparency and public consultation. Additionally, under subsection 269S(1), the TCO is considered to come into force on the day the application for the TCO was lodged, as seen with TCO No. 0510931 which is effective from 26 August 2005. The CEO must also ensure that the TCO does not disadvantage any person (other than the Commonwealth) or impose liabilities on any person in respect of actions taken before the date of registration, although in this case, the TCO does not impose any liabilities.
Failure to comply with the requirements of the Customs Act 1901 and its associated regulations can lead to various civil and criminal consequences. While the specific provisions of the Act do not detail offences or penalties directly related to TCOs, breaches of other sections within the Customs Act can result in substantial fines and imprisonment. For instance, under section 233 of the Customs Act, penalties for offences such as providing false information can include fines of up to 10,000 penalty units or imprisonment for up to five years, or both. These penalties underscore the seriousness with which the law treats non-compliance and the importance of adhering to the statutory obligations and requirements.