EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718673
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.
Tyco Electronics applied for a TCO in respect of certain extension leads on 31 October 2007.
Instrument
TCO No 0718673 was made on 31 January 2008. It declares that those certain extension leads 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. 0718673 is taken to have come into force on 31 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the imposition of customs duties on imported goods. One of the provisions of this Act is Part XVA, which allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. These orders are intended to provide a lower rate of customs duty on certain goods, under specific conditions. This legislative framework was introduced to address the need for tariff concessions that could encourage the importation of goods not produced domestically, thereby benefiting consumers and promoting competition within the Australian market. The policy objective behind the introduction of TCOs is to facilitate the importation of goods that are not domestically produced, thereby supporting market access and consumer choice. In this context, the explanatory statement outlines the process for the consideration and implementation of a TCO, including the application criteria, the role of the CEO in assessing applications, and the potential benefits for importers.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which apply lower rates of customs duty to specified goods. This mechanism is intended to benefit certain goods that are not produced in Australia in the ordinary course of business, as defined by the Act. The legislation applies to any person who can demonstrate that substitutable goods are not produced domestically, and the CEO must consider the application against the core criteria. The TCO process ensures that no person other than the Commonwealth is disadvantaged by the order, preserving existing rights and imposing no new liabilities. The scope of the Act extends to national borders, impacting all importers who can claim benefits under the TCO framework. Excluded from this concession are goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act can be further refined through subordinate instruments, which may specify additional conditions or criteria relevant to particular goods or industries.
Key Provisions
The Tariff Concession Instrument No. 0718673 (TCO No. 0718673) under the Customs Act 1901 applies to certain extension leads and modifies the applicable customs duty rate. Specifically, section 269P(3) of the Act mandates that if the Chief Executive Officer of Customs (CEO) determines that the application for a Tariff Concession Order (TCO) satisfies the core criteria, the CEO must issue a written order (section 269C). This order declares that the goods specified in the application are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, resulting in the applicable duty rate for these goods being free instead of the general 5% rate.
The Act imposes several obligations on the parties involved. Firstly, section 269F allows any person to apply for a TCO concerning specific goods. The CEO must then assess whether the application meets the core criteria, which includes determining if no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the criteria are met, the CEO is required to make a TCO as per section 269P(3). Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the application. In this case, the CEO did not receive any submissions, leading to the issuance of TCO No. 0718673.
Failure to comply with the requirements of the Customs Act 1901 may lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally attract significant penalties under the Customs Act 1901. For example, section 207 of the Act provides for penalties including fines and imprisonment for offences such as providing false information to a customs officer. The severity of penalties can vary depending on the nature and extent of the breach, with potential maximum penalties including substantial fines and lengthy imprisonment terms for serious violations.