EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802215
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 Pty Ltd applied for a TCO in respect of certain transmission power line parts on 11 October 2007.
Instrument
TCO No 0802215 was made on 11 April 2008. It declares that those certain transmission power line parts 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. 0802215 is taken to have come into force on 11 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 Australian Parliament, addresses the need for streamlined tariff concessions for specific goods, ensuring they are accessible and affordable. In 2008, Tariff Concession Order No. 0802215 was introduced to provide tariff relief on certain transmission power line parts, facilitating their import without the burden of customs duty. This order was made by the Chief Executive Officer of Customs, following a successful application by Powerlink Queensland Pty Ltd, and was designed to meet the core criteria outlined in the Customs Act. The instrument ensures that these critical components are exempt from the general rate of duty, which stands at 5%, thereby promoting the efficient and cost-effective acquisition of essential infrastructure goods.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0802215, applies to any entity seeking tariff concessions on specific goods, in this instance, Powerlink Queensland Pty Ltd's application for certain transmission power line parts. The Act is of Commonwealth jurisdiction and applies across Australia. The legislation allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce the rate of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument in question, TCO No. 0802215, was made on 11 April 2008, following an application by Powerlink Queensland Pty Ltd on 11 October 2007, and was effective from the date of the application. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions, and must publish a notice in the Gazette inviting submissions against the TCO, though in this case, no submissions were received. The TCO does not retroactively affect any rights or impose liabilities, but allows for duty refunds for importers of the specified goods since the TCO's effective date.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0802215, as outlined in the Customs Act 1901 (section 269F), permit the Chief Executive Officer of Customs (CEO) to issue a Tariff Concession Order (TCO) for certain goods if an application is made and the application meets the core criteria (section 269C). This means that if an applicant demonstrates that the goods in question do not have substitutable alternatives produced in Australia in the ordinary course of business (section 269D and section 269E), and the goods are not specified in section 269SJ of the Act, the CEO must make a written TCO. For the goods in question, the TCO specifies that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby reducing the duty from 5% to free.
The Act imposes several obligations on the parties involved. Firstly, the applicant must ensure that their application for a TCO is valid and meets the core criteria as outlined in sections 269C, 269D, and 269E. The CEO must then review the application, and if satisfied, proceed to issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received in response to the notice.
In terms of breaches and consequences, section 269K(1) of the Customs Act 1901 requires the CEO to invite submissions from any interested parties before making a TCO. Failure to comply with this requirement could be considered a breach of procedural fairness. However, the explanatory statement does not specify any particular penalties for such breaches. The Act does not impose any liabilities on any person, including the applicant or the Commonwealth, in respect of anything done or omitted to be done before the date of registration of the TCO. For importers, the TCO is beneficial as they may apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).