EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617155
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.
Signum Specialties Pty Ltd applied for a TCO in respect of certain transformer lines on 12 September 2006.
Instrument
TCO No 0617155 was made on 8 December 2006. It declares that those certain transformer lines 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 0%.
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. 0617155 is taken to have come into force on 12 September 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, provides a framework for the administration of customs and excise duties and includes provisions for the making of Tariff Concession Orders (TCOs) to provide tariff relief on certain goods. The Act aims to facilitate trade by reducing the cost of imported goods through tariff concessions. In 2006, Tariff Concession Instrument No. 0617155 was introduced to address the need for tariff concessions on specific goods, in this case, certain transformer lines, to ensure they were competitive with locally produced alternatives. The instrument was made under the authority of the Customs Act 1901, which allows the Chief Executive Officer of Customs to make such orders if certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective is to support industries by making imported goods more affordable, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0617155, made under Part XVA of the Customs Act 1901, applies to goods for which a Tariff Concession Order (TCO) has been applied and approved by the Chief Executive Officer of Customs. This instrument specifically pertains to certain transformer lines applied for by Signum Specialties Pty Ltd, which have been granted a TCO reducing their customs duty rate from 5% to 0%. The Act applies to any person or entity seeking to import goods that qualify for a tariff concession, provided that the goods do not fall under the exclusions listed in section 269SJ of the Act. The geographic and jurisdictional reach of this legislation is national, as it falls under the Commonwealth’s purview. The Act does not impose any liabilities on individuals or entities other than the Commonwealth and does not affect any pre-existing rights or liabilities incurred before the date of the TCO’s registration. The effectiveness of the TCO is backdated to the date of the application, 12 September 2006, meaning that importers can apply for refunds of duties paid on goods imported since that date.
Key Provisions
The main operative sections of this legislation include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, and section 269C, which outlines the core criteria that a TCO application must meet. Specifically, section 269C states that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires the CEO to make a written order if satisfied that the application meets the core criteria, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to consider applications for TCOs and to make a decision based on whether the application meets the core criteria as outlined in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). The Act also requires the CEO to ensure that 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 in respect of anything done or omitted to be done before the date of registration.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly state any criminal or civil penalties for failing to comply with the provisions of the Act. However, the CEO's decision to make a TCO is subject to judicial review, and any party adversely affected by the decision may seek recourse through the courts. Additionally, any person who knowingly or recklessly provides false or misleading information in an application for a TCO may be subject to penalties under section 271A of the Customs Act 1901, which provides for a penalty of up to five years' imprisonment or a fine of up to 5,000 penalty units, or both.