EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720912
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.
Powerlink Queensland applied for a TCO in respect of certain power transmission line on 6 December 2007.
Instrument
TCO No 0720912 was made on 10 May 2008. It declares that those certain power transmission line 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. One submission objecting to the TCO application was received from Dulhunty Power (Aust) Pty Ltd.
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. 0720912 is taken to have come into force on 6 December 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, provides a framework for the application of tariffs on imported goods, among other things. The Act was amended to include the introduction of Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs to grant concessions on the rate of customs duty applicable to certain goods. This was introduced to address the problem of ensuring that Australian industries can remain competitive by potentially reducing the duty on imported goods that do not have locally produced substitutes, thus supporting economic efficiency and potentially lowering costs for businesses that rely on such imports. The policy objective here is to facilitate trade and economic activity by providing a mechanism through which the duty on specific imported goods can be reduced, aiding in the competitive positioning of Australian industries. This mechanism was designed to be accessible, with provisions for public consultation when an application for a TCO is made, ensuring that the process is transparent and inclusive.
Scope and Application
The Tariff Concession Instrument No. 0720912 under the Customs Act 1901 applies to goods specified in the instrument, namely certain power transmission lines, and is designed to provide a concessionary rate of customs duty for these goods. The application of this Instrument is limited to the goods specified in the Instrument itself, and it is administered by the Chief Executive Officer of Customs (CEO), who evaluates whether the application for tariff concession meets the core criteria outlined in the Act. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia and the associated customs duties. The Instrument does not apply to goods that are specified in section 269SJ of the Customs Act 1901, which excludes certain goods from being subject to a Tariff Concession Order. The Instrument also extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which provides the specific tariff item (item 50) applicable to the power transmission lines. The commencement date of this Instrument is effectively the date of the application, 6 December 2007, with the Instrument coming into force on that date.
Key Provisions
The main operative sections of this legislation include sections 269F, 269C, and 269P, among others, which together facilitate the process of applying for and granting Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, the CEO must make a written order (section 269P(3)). This order, or TCO, declares that the goods in question are subject to a lower rate of customs duty, which is specified in Schedule 4 to the Customs Tariff Act 1995. In this particular case, the CEO was satisfied that Powerlink Queensland's application for a TCO for certain power transmission lines met the core criteria, as no substitutable goods were produced in Australia. Consequently, the CEO issued a TCO, granting a zero percent duty rate on these goods, effective from the date the application was lodged.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, applicants must ensure that their applications are lodged in accordance with the requirements of section 269F. The CEO has a duty to evaluate these applications against the core criteria specified in section 269C, which includes assessing whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This assessment involves determining whether the goods in question can be substituted by locally produced goods, as defined in section 269D. If the CEO is satisfied that the application meets these criteria, they must proceed to issue a TCO as mandated by section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO, as stipulated in subsection 269K(1).
The legislation also outlines specific consequences for any breach of the provisions contained within it. While the explanatory statement does not detail specific offences or penalties for non-compliance, it is reasonable to infer that failure to adhere to the requirements of the Customs Act 1901 or the terms of a TCO could result in legal action. For instance, if an entity were to import goods subject to a TCO without following the necessary procedures, they might face civil or criminal penalties as outlined in the relevant sections of the Customs Act or other applicable legislation. Given that this Act is a part of a broader regulatory framework, the penalties for breaches could include fines, imprisonment, or other administrative sanctions, depending on the severity and nature of the infringement.
In summary, the explanatory statement provides a comprehensive overview of the process and criteria for issuing a TCO under the Customs Act 1901. It delineates the roles and responsibilities of both applicants and the CEO, ensuring that the process is transparent and fair. Furthermore, it establishes the legal framework within which TCOs are granted and enforced, highlighting the importance of compliance with the Act's provisions to avoid potential legal repercussions.