EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719097
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.
Molex Premise Networks applied for a TCO in respect of certain cable management panels on 9 November 2007.
Instrument
TCO No 0719097 was made on 29 January 2008. It declares that those certain cable management panels 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. 0719097 is taken to have come into force on 9 November 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, provides a framework for the administration of customs and excise duties. One of the mechanisms within this framework is the Tariff Concession Order (TCO) process, which allows for the reduction or elimination of customs duty on certain goods. The Tariff Concession Instrument No. 0719097 was introduced to provide a tariff concession for specific cable management panels, addressing a gap in the availability of affordable, locally-produced alternatives. This instrument was enacted to streamline the process by which businesses can apply for and obtain duty concessions, thereby encouraging trade and economic efficiency by reducing the cost of importing these goods. The policy objective of this measure is to support industries that rely on imported components by making such components more affordable, thus potentially fostering growth and competitiveness in related sectors.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for Tariff Concession Orders (TCOs), which are implemented to provide reduced customs duties on certain goods. This legislation applies to any person or entity that imports goods eligible for a TCO, and the application process is overseen by the Chief Executive Officer of Customs. The application of a TCO is contingent upon the absence of substitutable goods produced in Australia in the ordinary course of business on the date the application was lodged. Notably, this Act does not apply to goods specified in section 269SJ, which are ineligible for TCOs. The scope of the Act extends federally across Australia, and its application can be further defined or restricted through subordinate instruments. The instrument TCO No. 0719097, for example, illustrates how specific goods, such as certain cable management panels, can benefit from this concession, effectively reducing their duty rate from 5% to free.
Key Provisions
The Customs Act 1901 (the Act) includes provisions under Part XVA, which establish the conditions under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) (s 269F). An applicant may submit an application for a TCO in relation to certain goods, and if the CEO determines that the application meets the specified criteria, a TCO is issued. The key provision here is section 269C, which stipulates that a TCO application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined in section 269D as goods produced in Australia that serve the same use, including design use, as the goods in question.
The CEO has an obligation under section 269P(3) to make a written order (a TCO) if satisfied that the application meets the core criteria. For instance, in the case of Molex Premise Networks' application for a TCO on certain cable management panels, the CEO was satisfied that no substitutable goods were being produced in Australia, leading to the issuance of TCO No. 0719097 on 29 January 2008. This order declared that the specified cable management panels were subject to a 5% duty rate, which was reduced to free under the TCO (s 269P(3)).
The Act also imposes certain procedural requirements on the CEO. Under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In the case of TCO No. 0719097, no submissions were received in response to the published notice. The TCO is considered to have come into force on the date the application was lodged (s 269S(1)), which in this case was 9 November 2007.
There are no explicit provisions in the Act regarding offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, the TCO itself does not affect the rights of any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the date of registration (s 269S(1)). Importers of the affected goods can apply for a refund of duty on goods imported since the TCO came into force (Reg 126(1)(r)).