EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513212
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.
Electrical Distribution & Transmission Pty Ltd applied for a TCO in respect of certain transformers on 29 September 2005.
Instrument
TCO No 0513212 was made on 23 December 2005. 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. 0513212 is taken to have come into force on 29 September 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 by the Australian Parliament and provides a framework for the administration of customs and excise duties. It includes provisions for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can apply reduced rates of customs duty to specified goods. Tariff Concession Instrument No. 0513212 was introduced to address the specific need of Electrical Distribution & Transmission Pty Ltd for a tariff concession on certain transformers. This instrument was enacted to ensure that the company could import these transformers at a reduced duty rate of 0%, as no substitutable goods were being produced in Australia. The instrument was created in accordance with the Act, ensuring that the application met the core criteria and was published in the Gazette with no objections received. The TCO aims to provide a beneficial effect on importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force on 29 September 2005, without imposing any liabilities on any person.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCOs) that allow for lower rates of customs duty on specified goods. This Act applies to any person or entity that imports goods into Australia and may seek a TCO from the Chief Executive Officer of Customs (CEO) if certain conditions are met. The CEO must determine if the application for a TCO is valid and meets the core criteria outlined in the Act, particularly that no substitutable goods are produced in Australia in the ordinary course of business. If these conditions are satisfied, a TCO can be issued, providing tariff relief for the specified goods. The application and issuance of TCOs are subject to national jurisdiction, impacting importers across Australia. The Act does not impose liabilities on any person other than the Commonwealth and does not affect existing rights as at the date of registration of the TCO. The application process involves public consultation, as the CEO must publish a notice in the Gazette inviting submissions, though no submissions were received in this particular instance. The TCO, once issued, is effective from the date the application was lodged.
Key Provisions
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be issued to apply lower rates of customs duty to specified goods, as outlined in section 269F. An application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO) by any person, provided that the goods in question are not those listed in section 269SJ, which are ineligible for tariff concessions. The CEO must then assess whether the application meets the core criteria specified in section 269C, which essentially requires that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. If satisfied, the CEO is required to issue a written order, or TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
The obligations imposed by the Act on the CEO include the duty to promptly publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to submit any objections to the making of the TCO. This process is mandated by subsection 269K(1). Additionally, the Act requires the CEO to ensure that any TCO does not adversely affect the rights of persons other than the Commonwealth or impose any liabilities on such persons in respect of actions taken prior to the TCO’s registration. Importers, however, benefit from the TCO as they can apply for a refund of duty paid on goods imported since the date the TCO is deemed to have come into force.
The Act does not explicitly outline specific offences or penalties for breaches related to the issuance of TCOs. However, it is understood that any failure to comply with the provisions of the Customs Act 1901 and the associated regulations could potentially lead to civil or criminal consequences. Such breaches may include the submission of false information in an application, which could be considered an offence under the Crimes Act 1914, carrying penalties that include fines or imprisonment. The precise penalties would depend on the nature and severity of the breach, and would be determined in accordance with the relevant legislative provisions.