EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701071
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.
Olex Cables Pty Ltd applied for a TCO in respect of certain winders on 19 January 2007.
Instrument
TCO No 0701071 was made on 13 April 2007. It declares that those certain winders 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. 0701071 is taken to have come into force on 19 January 2007.
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, as amended, includes provisions under Part XVA that allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument, F2007L01103, was introduced to address the need for tariff concessions on specific goods, thereby reducing customs duties for certain products. Enacted by the Parliament of Australia, the policy objective of this legislation is to facilitate the importation of goods by applying lower duty rates when no substitutable goods are produced domestically. The instrument was made to respond to an application by Olex Cables Pty Ltd for tariff concessions on certain winders, effectively reducing the customs duty on these goods from 5% to 0%. The process ensures that no person other than the Commonwealth is disadvantaged by the concession, and importers can apply for refunds on duties paid prior to the concession's effective date.
Scope and Application
The Tariff Concession Instrument No. 0701071, made under the Customs Act 1901, applies to entities and individuals who import goods that are the subject of a Tariff Concession Order (TCO). Specifically, this instrument applies to Olex Cables Pty Ltd's application for a TCO concerning certain winders, which are goods that are now subject to a lower rate of customs duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. The Act excludes any goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of this Act can be extended or restricted through subordinate instruments, although this particular instrument does not specify any further amendments or exclusions beyond what is outlined in the primary Act. The commencement date of the TCO is the date on which the application was lodged, which in this case was 19 January 2007, and the order came into effect on the same date.
Key Provisions
The Tariff Concession Instrument No. 0701071, under the Customs Act 1901, establishes a framework through which the Chief Executive Officer of Customs (CEO) may grant tariff concession orders (TCO) for certain goods, effectively reducing the customs duty rate for those goods (s. 269F). For example, in the case of Olex Cables Pty Ltd, the CEO granted a TCO for specific winders, reducing the duty from the general rate of 5% to 0% (s. 269P(3)). The instrument also outlines the conditions under which an application for a TCO may be considered, including that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s. 269C).
The Act imposes certain obligations on applicants and the CEO. An applicant must submit a valid application to the CEO for a TCO, ensuring that it pertains to goods not listed in section 269SJ, which prohibits specific goods from being subject to a TCO (s. 269F). Upon receiving a valid application, the CEO must assess whether it meets the core criteria and decide on the grant of a TCO (s. 269C). Additionally, as soon as practicable after accepting a TCO application, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be granted (s. 269K(1)).
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may result in legal consequences. Although the explanatory statement does not specify particular offences or penalties related to TCOs, breaches of the Customs Act can generally lead to civil and criminal penalties. For instance, penalties for breaches under the Customs Act can include fines of up to $22,200 for individuals and $111,000 for bodies corporate, as well as potential imprisonment for more serious offences (s. 285). The exact penalties depend on the nature and severity of the breach.
Overall, the Act and the TCO ensure that importers of the specified goods can benefit from reduced customs duties, provided they meet the criteria and the application process is followed correctly. The instrument also ensures transparency and fairness by allowing public submissions before a TCO is granted.