EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711990
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.
Rigging Construction Pty Ltd applied for a TCO in respect of certain electric power transmission line tensioners and pullers on 25 July 2007.
Instrument
TCO No 0711990 was made on 02 October 2007. It declares that those certain electric power transmission line tensioners and pullers 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. 0711990 is taken to have come into force on 25 July 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 Australian Parliament, was amended to include Part XVA, which provides a framework for the creation of Tariff Concession Orders (TCOs) through the Customs Act 1901 (the Act). This legislative amendment aimed to address the need for a mechanism to grant tariff concessions on imported goods under specific conditions, facilitating trade and economic benefits for certain sectors. The Tariff Concession Instrument No. 0711990, introduced by the Chief Executive Officer of Customs (the CEO), is an example of this mechanism in action. This instrument was created following an application by Rigging Construction Pty Ltd for tariff concessions on certain electric power transmission line tensioners and pullers. The CEO's decision to grant the concession was based on the absence of substitutable goods produced in Australia, aligning with the core criteria outlined in the Act. The policy objective of this instrument is to provide tariff relief to importers of these specific goods, thereby enhancing competitiveness and potentially lowering costs for businesses that rely on these imported items.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods, contingent upon meeting certain criteria outlined in the Act. Any individual or entity can apply for a TCO for goods that are not listed in section 269SJ, provided that on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. This applies to a national level, affecting all importers across Australia. The TCO does not retroactively affect any rights or liabilities of persons other than the Commonwealth and does not impose new liabilities on any person. Instead, it potentially benefits importers by allowing them to apply for a refund of duties on the relevant goods imported since the TCO came into effect, as specified under the Customs (Tariff) Regulations 1993. The geographic and jurisdictional reach of this legislation is therefore comprehensive, applying uniformly across Australia.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) concerning Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, a TCO is issued. 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. Section 269B provides definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that the CEO must issue a written order if satisfied that the application meets the core criteria. Section 269K requires the CEO to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application that does not pertain to goods specified in section 269SJ is evaluated against the core criteria. If the CEO is satisfied that no substitutable goods are produced in Australia, they must make a TCO. The applicant must provide sufficient information to allow the CEO to make this determination. Furthermore, the CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a valid application, inviting submissions from any person who believes the TCO should not proceed. In this instance, the CEO did not receive any submissions.
Breach of the conditions set out in the Customs Act 1901 may result in various civil and criminal consequences. However, the explanatory statement does not specify particular offences or penalties related to the issuance or non-compliance with a TCO. The Act generally allows for penalties for breaches of customs regulations, which can include fines and imprisonment. The exact penalties would depend on the specific nature of the breach and would be determined in accordance with the broader provisions of the Act. The explanatory statement focuses primarily on the procedural aspects of issuing a TCO rather than on the penalties for non-compliance.