EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607264
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.
Siemens Ltd applied for a TCO in respect of certain power cables on 24 April 2006.
Instrument
TCO No 0607264 was made on 14 July 2006. It declares that those certain power cables 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. 0607264 is taken to have come into force on 24 April 2006.
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 Australian Parliament, establishes a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods. This legislation was introduced to address the need for streamlined tariff concessions that support Australian industry and trade by reducing the duty on goods that are not produced domestically or are not readily available in the Australian market. As stated in the explanatory statement, the objective is to ensure that such concessions are made when there are no substitutable goods produced in Australia, thereby protecting domestic industries from unfair competition. The Customs Act 1901 provides a mechanism for the CEO to evaluate applications for TCOs and, if the criteria are met, to issue an order that reduces the customs duty on the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0607264, made under the Customs Act 1901, applies to entities or individuals who are eligible to make an application for a Tariff Concession Order (TCO) for specific goods. This application process is overseen by the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria outlined in the Act. Specifically, a TCO may be granted if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The instrument, which came into effect on 24 April 2006, was made following an application by Siemens Ltd for certain power cables. The CEO's decision to grant the TCO was based on the finding that no substitutable goods were produced in Australia, thus qualifying the power cables for a reduced customs duty rate. The Act provides for the publication of such applications in the Gazette, inviting public submissions, although in this case, none were received. The TCO specifically applies to the customs duties on the specified power cables, reducing the general duty rate of 5% to free duty, thereby benefiting importers who can apply for a refund of duties on goods imported since the date the TCO came into force.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0607264 under the Customs Act 1901 (section 269C) require that a Tariff Concession Order (TCO) application is assessed to ensure that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If the Chief Executive Officer of Customs (CEO) determines that this core criterion is met, they must issue a TCO granting tariff concessions for the specified goods (section 269P(3)). The instrument in question pertains to specific power cables, which are subject to a zero rate of duty, rather than the general 5% duty (section 269P(3)).
The obligations imposed by the Act on the parties or entities it governs are multifaceted. The CEO must ensure that any TCO application is evaluated against the core criteria and that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. Additionally, the CEO has a responsibility to publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to submit their views on whether the TCO should be made (section 269K(1)). The TCO itself does not retroactively affect the rights of any person other than the Commonwealth, and it does not impose any liabilities on any person for actions taken before the TCO's registration date (subsection 269S(1)).
In terms of breaches and consequences, the Customs Act 1901 does not explicitly state offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO or the process for obtaining one. However, general provisions in the Customs Act may apply, and any breaches of the Act or Regulations could result in penalties under the respective sections of the Act or Regulations. These penalties can include fines and, in serious cases, criminal charges. The specific penalties would depend on the nature of the breach and would be determined according to the relevant sections of the Act and any subsidiary legislation.
The Tariff Concession Instrument No. 0607264 effectively outlines the process and criteria for granting tariff concessions for certain power cables under the Customs Act 1901. It sets out the obligations of the CEO in assessing applications and publishing notices, and it ensures that the rights of importers and other stakeholders are protected. While the Act does not detail specific penalties for non-compliance with the TCO process, it is clear that any breaches of the Customs Act or Regulations could lead to significant consequences, including fines and potential criminal charges.