EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709549
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.
Graph Solutions Pty Ltd applied for a TCO in respect of certain line post insulators on 20 June 2007.
Instrument
TCO No 0709549 was made on 7 September 2007. It declares that those certain line post insulators 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. 0709549 is taken to have come into force on 20 June 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, enacted by the Commonwealth Parliament, establishes a framework for the imposition of customs duty on imported goods. The Act, through Part XVA, allows for Tariff Concession Orders (TCOs) which can reduce or eliminate customs duty on specific goods. This mechanism was introduced to address the need for tariff concessions to support Australian industries by potentially lowering costs and enhancing competitiveness. The Tariff Concession Instrument No. 0709549 was enacted on 7 September 2007 in response to an application from Graph Solutions Pty Ltd for a TCO on certain line post insulators, effectively reducing the customs duty on these goods from 5% to 0%. This legislative action aligns with the policy objective of providing economic relief and fostering industrial growth by reducing the cost burden on specific imports.
Scope and Application
The Customs Act 1901, as amended, provides for the imposition of customs duty on goods imported into Australia, with certain exceptions as outlined in specific provisions of the Act. Under Part XVA, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders effectively reduce the customs duty payable on specified goods if it can be demonstrated that no substitutable goods are produced in Australia. A TCO can be applied for by any person, and once the CEO is satisfied that the application meets the core criteria, including the absence of substitutable goods being produced domestically, a TCO can be issued. The application of a TCO is limited to the goods specified in the order and does not affect existing rights or impose liabilities on persons other than the Commonwealth in respect of actions taken prior to the TCO's effective date. The TCO's jurisdiction is national, aligning with the broader scope of the Customs Act, which operates across all states and territories of Australia.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0709549, under the Customs Act 1901, pertain to the process of applying for and receiving a Tariff Concession Order (TCO) (sections 269F, 269C, 269SJ, and 269P). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the application is deemed valid and meets the core criteria set out in section 269C, the CEO must issue a written order (section 269P). This order specifies that the goods in question are subject to a lower rate of customs duty as outlined in Schedule 4 to the Customs Tariff Act 1995. This particular instrument, TCO No. 0709549, concerns certain line post insulators, which will now be subject to a 0% duty rate, down from the usual 5%.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO does not concern goods specified in section 269SJ, which are ineligible for tariff concessions. Furthermore, the CEO is required to assess whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia on the date the application was lodged (section 269C). Additionally, as soon as the CEO accepts a TCO application as valid, they must publish a notice in the Gazette, inviting any person who may object to the concession to lodge a submission (subsection 269K(1)). In this case, no objections were received.
Failure to comply with the requirements of the Customs Act 1901, including improper application or misrepresentation of facts in a TCO application, can result in civil or criminal consequences. Under section 164 of the Act, a person found guilty of an offence against the Act is liable to a penalty of up to 10,000 penalty units, which currently equates to approximately AUD 1.85 million. Additionally, section 272 of the Crimes Act 1914 imposes further penalties for fraudulent behaviour, including imprisonment for up to 10 years. It is crucial for all parties involved to adhere to the Act's requirements to avoid these penalties and consequences.