EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721821
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.
Tamco Electrical Industries Pty Limited applied for a TCO in respect of certain busbar solid insulating system on 18 December 2007.
Instrument
TCO No 0721821 was made on 07 March 2008. It declares that those certain busbar solid insulating system 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. 0721821 is taken to have come into force on 18 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 Australian Parliament, provides a framework for administering customs duties and regulations. To address the issue of tariff concessions for specific goods, the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under section 269F, provided certain criteria are met. A significant objective of the Act, as outlined in section 269C, is to ensure that no substitutable goods are produced in Australia in the ordinary course of business when considering a TCO application. This legislative instrument, F2008L01280 (Tariff Concession Instrument No. 0721821), was introduced to provide a tariff concession for certain busbar solid insulating systems, effectively granting a free duty rate for these goods. This concession was made in response to an application by Tamco Electrical Industries Pty Limited, and the order came into effect on the date the application was lodged, 18 December 2007. The TCO aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, as part of its framework for tariff concessions, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The application of these orders applies to specific goods, providing a lower rate of customs duty, subject to the core criteria outlined in the Act. For instance, the Act requires that no substitutable goods produced in Australia can be put to a use that corresponds with the goods in question. The scope of the legislation extends to any person or entity seeking to import goods that would benefit from such tariff concessions, provided the application does not pertain to goods explicitly excluded under section 269SJ. The TCOs are applicable across the Commonwealth of Australia and are not restricted to particular states or territories, ensuring a uniform approach to tariff concessions. The Act does not impose liabilities on any person other than the Commonwealth, safeguarding the interests of entities affected by the concessions. The application of the TCO can be further extended or specified through subordinate instruments, aligning with the overarching objectives of the Customs Act 1901.
Key Provisions
The key operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0721821, pertain to the application and approval of Tariff Concession Orders (TCOs) (sections 269F, 269C, and 269P). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria (section 269C), which include the absence of substitutable goods produced in Australia in the ordinary course of business (section 269B and 269E), the CEO must make a written order declaring that the goods in question are subject to a lower rate of customs duty. This instrument specifically relates to certain busbar solid insulating systems and reduces their duty rate from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on parties and entities are centred around the application and assessment processes for TCOs. The CEO must, upon receiving an application, assess whether it meets the core criteria, including the absence of substitutable goods produced in Australia. The CEO is also required to publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). The CEO is further obligated to ensure that any TCO does not disadvantage any person (other than the Commonwealth) or impose liabilities in respect of actions taken before the TCO’s registration date (subsection 269S(1)).
In terms of potential offences and penalties for breaches, the Customs Act 1901 does not explicitly outline specific offences related to TCO applications within this explanatory statement. However, general contraventions of the Customs Act can lead to civil or criminal penalties. Civil penalties may include fines up to a significant amount, while criminal penalties could involve imprisonment, reflecting the severity of the breach. The exact penalties depend on the nature and extent of the violation but are designed to ensure compliance with customs regulations and duty obligations.