EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617948
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.
Wilson Transformer Company Pty Ltd applied for a TCO in respect of certain paper covered, stranded copper cables on 25 October 2006.
Instrument
TCO No 0617948 was made on 15 January 2007. It declares that those certain paper covered, stranded copper 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. 0617948 is taken to have come into force on 25 October 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 Parliament of Australia, establishes a framework for the imposition of customs duties and the regulation of imports and exports. The Act was introduced to address the need for a systematic approach to managing customs duties, facilitating trade, and protecting domestic industries. One of the mechanisms provided by the Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duties on specific goods under certain conditions. The Tariff Concession Instrument No. 0617948, enacted in 2007, is an example of how the Act is applied to provide tariff concessions. This instrument was introduced to address the specific needs of an applicant, Wilson Transformer Company Pty Ltd, by providing a tariff concession on certain paper covered, stranded copper cables. The instrument was made after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO as outlined in the Act. This concession aims to benefit importers by potentially reducing their duty liabilities on these goods.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for Tariff Concession Orders (TCOs) which can be applied for by any person seeking to import goods into Australia. The Act applies to these goods, with a specific focus on those that are not produced in Australia and do not have substitutable goods available domestically. The application of TCOs is subject to approval by the Chief Executive Officer of Customs, who must determine if the goods meet the core criteria outlined in section 269C of the Act. Notably, this scheme does not apply to goods specified in section 269SJ, which lists those ineligible for tariff concessions. The application process also involves a public consultation period as mandated by section 269K(1) of the Act, although in the case of TCO No. 0617948, no submissions were received. The tariff concession becomes effective from the date the application is lodged, as per section 269S(1) of the Act, and it does not impose any new liabilities or adversely affect the rights of any person as at the date of registration. The Tariff Concession Instrument No. 0617948, made on 15 January 2007, specifically pertains to certain paper-covered, stranded copper cables, reducing their duty from 5% to free.
Key Provisions
The main operative sections of the Customs Act 1901, in relation to Tariff Concession Orders (TCOs), include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods (s 269F). If the CEO is satisfied that the application meets the core criteria, they 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 applies (s 269P(3)). Section 269C states 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 (s 269C). Definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively.
The Act imposes certain obligations and requirements on the parties involved in the TCO process. For instance, an applicant must submit an application to the CEO for a TCO in respect of certain goods, and the CEO must determine if the application meets the core criteria, as outlined in section 269C. If the CEO is satisfied that the application meets the criteria, they must make a TCO and publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (s 269K(1)). The CEO is also required to consider any submissions received in response to the notice before making a final decision on the TCO.
The Customs Act 1901 outlines various offences, penalties, and civil or criminal consequences for breach. While the explanatory statement does not provide specific details on penalties for breach of TCO provisions, it is reasonable to assume that breaches of the Act or regulations may result in civil or criminal penalties. For example, knowingly making a false statement or representation in an application for a TCO could potentially lead to prosecution under section 269H of the Act, which carries a penalty of a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Furthermore, failure to comply with the TCO or the Customs Act 1901 in general could result in penalties such as fines, imprisonment, or both, depending on the severity of the breach.