EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510943
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 outdoor terminations on 26 August 2005.
Instrument
TCO No 0510943 was made on 25 November 2005. It declares that those certain power cable outdoor terminations 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. 0510943 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, enacted by the Parliament of Australia, provides for a comprehensive framework governing customs and border control. One aspect of this framework is the ability to grant tariff concession orders (TCOs) to lower the rate of customs duty on certain goods. The Tariff Concession Instrument No. 0510943, issued under the Customs Act, was introduced to address the need for tariff concessions on specific imported goods where no suitable Australian-made alternatives exist. The policy objective is to support industries by reducing the cost of importing certain goods, thereby potentially increasing their competitiveness and availability in the Australian market. The instrument was made by the Chief Executive Officer of Customs, following an application by Olex Australia Pty Ltd for tariff concessions on certain power cable outdoor terminations, and it came into effect on the date of the application, 26 August 2005.
Scope and Application
The Tariff Concession Instrument No. 0510943 applies to the import of certain power cable outdoor terminations, which are subject to a lower rate of customs duty. The instrument is made under section 269F of the Customs Act 1901 and applies to the goods specified in the instrument, which are those declared to be subject to a tariff concession order. This order was made by the Chief Executive Officer of Customs following an application by Olex Australia Pty Ltd. The concession applies to the Commonwealth and potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the day the concession is taken to have come into force. The instrument is applicable nationally and its application is not restricted to any specific state or territory. There are no stated exclusions or exemptions in this particular instrument, though section 269SJ of the Act outlines goods that cannot be subject to a tariff concession order. The application and scope of the Act may be extended or restricted through subordinate instruments, such as regulations or further orders made by the CEO.
Key Provisions
The Tariff Concession Instrument No. 0510943, issued under the Customs Act 1901, establishes a lower rate of customs duty for certain power cable outdoor terminations (sections 269C, 269F, 269SJ). This instrument is effective from the date the application was lodged, which was 26 August 2005, and declares that these specific power cable terminations are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that the general duty rate of 5% is reduced to free for these goods.
The Act imposes certain obligations on the Chief Executive Officer of Customs (CEO) when considering an application for a Tariff Concession Order (TCO). Firstly, the CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. Secondly, the CEO must verify that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1)).
If the CEO is satisfied that the application meets the core criteria, they are required to make a written order (TCO) declaring that the goods specified in the application are subject to the prescribed tariff concession (subsection 269P(3)). For Olex Australia Pty Ltd’s application, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0510943 on 25 November 2005. This TCO provides a zero duty rate for the specified power cable terminations, benefiting importers who can now apply for duty refunds on these goods imported since 26 August 2005 (subsection 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO can result in various consequences. While the explanatory statement does not detail specific penalties for breach, breaches of the Customs Act generally can lead to civil and criminal penalties. For instance, providing false or misleading information in an application may result in fines or imprisonment under section 269Z of the Act. Additionally, any misuse of the tariff concessions provided by a TCO could also lead to financial penalties or other enforcement actions by the CEO.