EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617523
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.
Hamilton Island Enterprises Limited applied for a TCO in respect of certain submarine power cables on 06 September 2006.
Instrument
TCO No 0617523 was made on 24 November 2006. It declares that those certain submarine 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. 0617523 is taken to have come into force on 06 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 was enacted to regulate the importation and exportation of goods, including the imposition of customs duties. The Act provides for the creation of Tariff Concession Orders (TCOs), which allow for reduced customs duties on certain goods under specific conditions. The Tariff Concession Instrument No. 0617523, enacted in 2006, addresses the need for concessional tariffs on specific goods by allowing the Chief Executive Officer of Customs to grant these orders. This legislative instrument was introduced to provide relief to businesses and consumers by reducing the customs duty on particular goods, thereby making them more affordable. The objective of the Act, as stated, is to ensure that the tariff concessions are granted in a manner that benefits importers and does not impose any new liabilities or disadvantage existing rights. The instrument was made in accordance with the provisions of the Customs Act 1901 and took effect from the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty for certain goods. A person may apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The CEO is required to decide whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If the application meets these criteria, the CEO must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, thereby applying the lower duty rate. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. The TCO does not affect existing rights or impose any liabilities on any person, except to beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The main operative sections of this legislation pertain to the establishment and enforcement of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, a written order must be made, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
This legislation imposes specific obligations on the CEO of Customs. Once a TCO application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as per subsection 269K(1). Furthermore, the CEO is required to decide whether the application meets the core criteria, which involves determining if substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as outlined in section 269C.
The legislation also outlines the consequences for breaches, although it does not specify criminal or civil penalties. However, it does state that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration to disadvantage that person or impose liabilities for actions taken before the registration date. Importers are afforded the benefit of applying for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations. There are no stated maximum penalties for non-compliance with the provisions of the TCO, but failure to adhere to the outlined procedures could result in the TCO not being granted or enforced effectively.