EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620218
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.
Triangle Cables Pty Ltd applied for a TCO in respect of certain electroplating lines on 28 December 2006.
Instrument
TCO No 0620218 was made on 9 March 2007. It declares that those certain electroplating 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. 0620218 is taken to have come into force on 28 December 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, includes provisions under Part XVA that allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders aim to provide relief from customs duty on specific goods by reducing the rate to zero if certain criteria are met, such as the absence of substitutable goods produced in Australia. The objective of this legislative scheme is to facilitate the import of goods that are not domestically produced, thereby encouraging trade and economic activity. The Tariff Concession Instrument No. 0620218, issued on 9 March 2007, is an example of such an order, which was made in response to an application by Triangle Cables Pty Ltd for certain electroplating lines, reducing their duty rate from 5% to 0%. This instrument was introduced without any submissions against it, highlighting a smooth process and no anticipated disadvantage to persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0620218 is an instrument made under Part XVA of the Customs Act 1901, which governs the process for granting tariff concessions on certain imported goods. This particular instrument was made in response to an application by Triangle Cables Pty Ltd for a tariff concession order (TCO) concerning certain electroplating lines. The instrument applies to those specific electroplating lines and their importation into Australia, providing a zero per cent duty rate on these goods as of 28 December 2006, the date the application was lodged. The TCO applies across the Commonwealth of Australia, extending the tariff concession to the entire nation. The instrument does not affect the rights of any person other than the Commonwealth, ensuring that no existing rights or liabilities are disadvantaged or imposed as a result of the TCO. The instrument operates within the parameters set by the Customs Act 1901, which mandates the process for applying for and making TCOs, and does not extend beyond the specific goods outlined in the application.
Key Provisions
The main sections of the Tariff Concession Order No. 0620218, as it applies under the Customs Act 1901, are section 269C and section 269P. Section 269C outlines the core criteria for a Tariff Concession Order (TCO) application, which must be met for the Chief Executive Officer (CEO) of Customs to consider granting the concession. Section 269P, meanwhile, requires the CEO to make a written order if the application meets these criteria, thereby effectively granting the concession and reducing the duty on specified goods.
The Act imposes several obligations on parties applying for a TCO. Firstly, applicants must ensure their application meets the core criteria as stipulated in section 269C. This means that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made, as per subsection 269K(1). If no submissions are received, the CEO proceeds to decide on the application.
Failure to comply with the requirements of the Customs Act 1901 or any regulations can lead to various consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally can result in fines and, in severe cases, imprisonment. The maximum penalties would depend on the specific breach, but they can include significant financial penalties and potential criminal charges for serious violations. Importers who benefit from the TCO can apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
The Tariff Concession Order No. 0620218, which declares that certain electroplating lines are subject to a 0% duty rate instead of the general 5% rate, came into force on 28 December 2006. This order ensures that no person (other than the Commonwealth) is disadvantaged or imposed with liabilities concerning actions taken before the order's registration date. Importers of these goods, however, will have their rights beneficially affected, allowing them to claim duty refunds for goods imported since the TCO's effective date.