EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516812
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.
Nortel Networks Australia Pty Limited applied for a TCO in respect of certain optoelectric circuit board equipment rack coolers on 20 December 2005.
Instrument
TCO No 0516812 was made on 10 March 2006. It declares that those certain optoelectric circuit board equipment rack coolers 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. 0516812 is taken to have come into force on 20 December 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 Tariff Concession Instrument No. 0516812 was enacted in 2006 under the Customs Act 1901 to address a specific economic and trade-related issue concerning tariff concessions on certain imported goods. The Act, which was passed by the Australian Parliament, establishes a framework for the Chief Executive Officer of Customs to grant tariff concessions on goods, thereby facilitating more competitive pricing and potentially stimulating economic activity by reducing the cost of importing certain items. This legislative instrument was introduced to ensure that the tariff concessions scheme operates effectively, providing clarity and procedural guidance on how and when such concessions can be applied. The policy objective is to enable the reduction or elimination of customs duty on particular goods, thereby supporting industries by making imported materials more affordable and enhancing their competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0516812, issued under the Customs Act 1901, applies to specific optoelectric circuit board equipment rack coolers, facilitating tariff concessions for these goods. The Act allows for the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) if certain criteria are met, such as the absence of substitutable goods produced in Australia. The TCO affects the importation of these goods by reducing their customs duty rate from 5% to free, benefiting importers who can apply for a refund of duties paid before the TCO's effective date. The application of this TCO is limited to the particular goods specified in the instrument and does not extend to other goods not listed in the application or those specified in section 269SJ of the Act as ineligible for TCOs. The instrument operates nationally, covering all imports into Australia, and does not disadvantage any person's rights or impose liabilities for actions taken before the TCO's effective date, which is 20 December 2005.
Key Provisions
The Tariff Concession Instrument No. 0516812 under the Customs Act 1901 (the Act) provides specific relief on customs duties for certain optoelectric circuit board equipment rack coolers. Section 269F of the Act allows for the application of Tariff Concession Orders (TCOs) by interested parties, with section 269C outlining the core criteria that must be met for such an order to be considered. Specifically, for a TCO application to be valid, it must be established that no substitutable goods were produced in Australia at the time of the application (section 269C). These terms, 'substitutable goods', 'ordinary course of business', and 'produced in Australia', are further defined by sections 269D, 269E, and 269P respectively. If the Chief Executive Officer of Customs (the CEO) determines that these criteria are satisfied, a TCO must be issued (section 269P(3)), which in this case was done on 10 March 2006.
The obligations imposed by this legislation primarily rest on the CEO of Customs. Upon receiving a valid TCO application, the CEO must assess whether the core criteria are met and, if so, issue a TCO. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, thus fulfilling the criteria for issuing TCO No. 0516812 (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This process was followed, though no submissions were received in response to the notice.
The Act also outlines potential consequences for breaches related to TCOs. Although the explanatory statement does not specify penalties for non-compliance with TCOs, breaches of other provisions under the Customs Act 1901 can lead to civil and criminal penalties. For example, knowingly making a false statement or representation can attract a maximum penalty of 10,000 penalty units under section 246AA of the Act. Additionally, failure to comply with a direction or requirement can result in fines of up to 10,000 penalty units under section 246AB. While the specific TCO in question does not introduce new offences, it is subject to the broader regulatory framework of the Customs Act 1901, which includes stringent measures to ensure compliance.