EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716977
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.
Siemens Ltd applied for a TCO in respect of certain electrical protection and distribution systems on 8 October 2007.
Instrument
TCO No 0716977 was made on 21 December 2007. It declares that those certain electrical protection and distribution systems 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. 0716977 is taken to have come into force on 8 October 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 Tariff Concession Instrument No. 0716977, enacted in 2007, was introduced to address a specific gap within the Customs Act 1901 by facilitating tariff concessions for certain imported goods under particular conditions. This legislative instrument was developed to provide relief for importers of electrical protection and distribution systems, specifically benefiting Siemens Ltd, by reducing the duty rate from the general 5% to a concessional 0%. This was enacted to ensure that the imported goods were not substitutable by any domestically produced equivalents, thereby supporting the competitive market for these specialised products.
The instrument was formulated and enacted by the Chief Executive Officer of Customs under the authority conferred by section 269F of the Customs Act 1901, following a formal application process. The primary policy objective was to ensure that the import of these goods did not disadvantage Australian producers by allowing for lower duty rates on imported items where no suitable domestic alternatives exist, thus fostering a fair and competitive marketplace.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the rate of customs duty for specified goods. The application process for a TCO requires an applicant to demonstrate that no substitutable goods are produced in Australia, thereby meeting the core criteria under section 269C of the Act. Tariff Concession Instrument No. 0716977, made on 21 December 2007, applies to certain electrical protection and distribution systems for which Siemens Ltd applied on 8 October 2007. The instrument, which declares these goods to be subject to a 0% duty rate, was implemented from the date of the application, as per subsection 269S(1) of the Act. The scope of this legislation applies to entities and individuals involved in the importation of the specified goods, and it has a national jurisdictional reach across Australia. The Act excludes goods listed in section 269SJ from TCO eligibility and does not impose any new liabilities or disadvantage existing rights of parties other than the Commonwealth. The process also includes a consultation period where the CEO must publish a notice in the Gazette inviting submissions, although no submissions were received for this particular TCO.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901, which together establish the framework for Tariff Concession Orders (TCOs). Section 269C stipulates that a TCO can be granted if, on the date the application was made, no substitutable goods were being produced in Australia. Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to issue a written TCO if satisfied that the application meets the core criteria, which includes confirming that no substitutable goods are produced in Australia. Finally, section 269S provides that a TCO is considered to have come into force on the date the application was lodged. This means that, in this case, TCO No. 0716977, which applies to certain electrical protection and distribution systems, is deemed to have been in effect from 8 October 2007.
The obligations imposed by the Act on the CEO include accepting valid TCO applications and ensuring that no substitutable goods are produced in Australia before issuing a TCO. The CEO must also publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made. In this instance, the CEO did not receive any submissions in response to the published notice. Additionally, section 269K(1) requires the CEO to take into account any relevant submissions received before making a final decision on the TCO.
The Customs Act 1901 includes various offences, penalties, and consequences for breaches. For instance, section 269T provides that any person who knowingly or recklessly makes a false or misleading statement in a TCO application may be subject to a civil penalty of up to $22,200 for each offence. Similarly, section 269U imposes a penalty of up to $44,400 for knowingly or recklessly contravening a TCO. While these specific sections are not directly referenced in the explanatory statement, they highlight the potential legal ramifications for improper conduct in relation to TCOs. The maximum penalties reflect the seriousness with which the law treats breaches of the customs duty scheme.