EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721994
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.
Olex Australia Pty Ltd applied for a TCO in respect of certain cable drum transporters on 24 December 2007.
Instrument
TCO No 0721994 was made on 14 March 2008. It declares that those certain cable drum transporters 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. 0721994 is taken to have come into force on 24 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 was enacted to facilitate international trade by establishing a regulatory framework for customs and border control in Australia. One of its key components is the scheme for Tariff Concession Orders (TCOs), which was introduced to address the problem of ensuring that Australian industries remain competitive by granting tariff concessions on certain imported goods. This scheme allows the Chief Executive Officer of Customs to reduce or eliminate customs duties on specific goods if no substitutable goods are produced in Australia, thereby promoting economic efficiency and industry development. The policy objective, as stated in the Act, is to support Australian industries by preventing the displacement of domestic production and ensuring that imports do not undermine local manufacturers. This approach aids in maintaining a balanced trade environment and supports the economic interests of Australian businesses. The Tariff Concession Instrument No. 0721994, made in 2008, exemplifies this policy by granting a tariff concession on certain cable drum transporters, aligning with the overarching goals of the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0721994, issued under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) for specific goods, namely certain cable drum transporters. This instrument applies to the Commonwealth and is designed to facilitate the importation of goods by providing a lower rate of customs duty, in this case, making it duty-free. The TCO applies to entities and individuals who import these specified cable drum transporters into Australia. The process for obtaining a TCO is governed by section 269F of the Act, which stipulates that an application must be made to the Chief Executive Officer (CEO) of Customs, who will assess whether the application meets the core criteria outlined in section 269C. Notably, the CEO must ensure that no substitutable goods are produced in Australia before approving a TCO. The instrument has a national reach, impacting all importers of the specified goods within Australia. The TCO does not affect any existing rights of persons other than the Commonwealth and does not impose new liabilities. Importers can apply for a refund of duty on goods imported since the day the TCO is considered to have come into effect. The instrument’s scope may be extended or refined through subordinate instruments, which could further detail the application and enforcement of the TCO.
Key Provisions
The primary sections of this legislation focus on the process of applying for and issuing Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO determines that the application pertains to goods not listed in section 269SJ (which includes goods that cannot be subject to a TCO), they must then assess whether the application meets the core criteria outlined in section 269C. The application will meet these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must issue a written order, the TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as per subsection 269P(3).
The obligations imposed by this Act on the parties involved primarily concern the application and review process for TCOs. The applicant must ensure that their application is valid and pertains to goods not excluded under section 269SJ. The CEO is obligated to review the application, assess whether it meets the core criteria, and publish a notice in the Gazette inviting submissions from any interested parties. This process is designed to allow for public scrutiny before a TCO is issued. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person for actions taken prior to the registration of the TCO.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly state any criminal penalties for failing to comply with the requirements of a TCO. However, failure to adhere to the terms of the TCO or any misrepresentation in the application process could potentially lead to civil consequences, such as fines or the need to repay any unjustifiably received tariff concessions. The maximum penalties for such breaches would typically be determined by other relevant laws and regulations, rather than the TCO itself. It is important to note that while the TCO does not impose new liabilities on individuals or entities, any existing liabilities or obligations under other legislation would remain unaffected.