EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714200
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.
Prysmian Power Cables & Systems Australia Pty Limited applied for a TCO in respect of certain aluminium wire rod on 03 September 2007.
Instrument
TCO No 0714200 was made on 09 November 2007. It declares that those certain aluminium wire rods 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. 0714200 is taken to have come into force on 03 September2007.
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, addresses the need for a structured scheme for tariff concessions that reduce the duty on certain imported goods, enhancing trade efficiency and competitiveness. Under this Act, the Chief Executive Officer of Customs has the authority to issue Tariff Concession Orders (TCOs) that apply reduced customs duty rates to specific goods. This legislative framework aims to facilitate the import of goods that do not have domestic alternatives, thus supporting the policy objective of encouraging competitive practices in the Australian market. The explanatory statement outlines the process and criteria for such concessions, ensuring transparency and adherence to the legislative intent by requiring public consultation and publication of TCO applications. The TCO No. 0714200, made on 9 November 2007, exemplifies this process by granting tariff concessions on certain aluminium wire rods, thereby benefiting importers by eliminating duty costs on these specific goods.
Scope and Application
The Tariff Concession Instrument No. 0714200, enacted under Part XVA of the Customs Act 1901, applies to specific goods, in this case certain aluminium wire rods, as determined by an application made to the Chief Executive Officer of Customs. The Act allows for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO), provided that the application meets the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO is applicable to Prysmian Power Cables & Systems Australia Pty Limited, the applicant in this instance, and affects the customs duty rate on the specified goods, reducing it from the general rate of 5% to free duty. The geographic reach of this legislation is national, applying across Australia in accordance with the Customs Act 1901, and it extends to the entire Commonwealth. The instrument does not disadvantage any person other than the Commonwealth and imposes no new liabilities on any individual or entity, safeguarding the rights of importers who can apply for duty refunds on imports of these goods since the TCO's effective date. The Act may also extend its application through subordinate instruments, such as regulations, which can further define terms and processes.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides for the creation of Tariff Concession Orders (TCOs) which apply reduced rates of customs duty to certain goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO determines that the application pertains to goods not excluded under section 269SJ and meets the core criteria outlined in section 269C, a TCO can be made. The core criteria essentially require that, on the date of the application, no goods that could substitute for the ones being applied for are produced in Australia in the ordinary course of business. Definitions for terms such as "substitutable goods" and "ordinary course of business" are provided in sections 269D, 269E, and 269F respectively.
The obligations imposed on parties by this legislation include the requirement for the CEO to make a written TCO if the application meets the core criteria as outlined in section 269P(3). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any person who may have reasons against the making of the TCO, as per section 269K(1). In the case of TCO No. 0714200, the CEO was required to ensure that the application for tariff concession was valid, and no submissions were received that would negate the making of the TCO. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date.
In terms of consequences for breach, the Act does not explicitly detail specific offences or penalties for failing to comply with the provisions related to TCOs. However, the general legal framework within which this Act operates implies that non-compliance with statutory requirements could result in legal action or administrative penalties. The nature and severity of such penalties would be determined by the context of the breach and the specific provisions of other related legislation. The absence of explicit penalties in this particular piece of legislation suggests that compliance is largely ensured through administrative oversight and the legal recourse available under broader legal principles.