EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802361
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 Qld Pty Ltd applied for a TCO in respect of certain transmission power line parts on 11 October 2007.
Instrument
TCO No 0802361 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. 0802361 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 was enacted by the Parliament of Australia to regulate the importation of goods into the country, including the imposition of customs duties. Part XVA of this Act provides for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which reduce the rate of customs duty on specified goods. The legislation was designed to address the need for a streamlined process to grant tariff concessions on goods, ensuring that the Australian market remains competitive and that certain industries can access necessary materials without undue financial burden. The objective of the Tariff Concession Instrument No. 0802361, which was issued under this Act, is to provide tariff relief on certain transmission power line parts by reducing the duty rate from the general rate of 5% to free. This instrument was introduced following an application by Powerlink Qld Pty Ltd, and the CEO was satisfied that the application met the core criteria, specifically that no substitutable goods were produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0802361 under the Customs Act 1901 applies to specific goods, namely certain transmission power line parts, and pertains to the process by which these goods are granted a concession on customs duty. This legislative instrument is relevant to Powerlink Qld Pty Ltd, which applied for the tariff concession. The application of the Act is confined to the Commonwealth jurisdiction, and it does not extend to state or territory laws. The Act excludes goods specified in section 269SJ of the Customs Act 1901 from being subject to a Tariff Concession Order (TCO). The Act’s scope can be extended or restricted through subordinate instruments, although the provided details do not specify such instruments. The concession declared by the TCO applies retroactively to the date the application was lodged, offering benefits to importers by potentially allowing them to claim a refund of duty for goods imported since that date.
Key Provisions
The key operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P. Section 269F (2) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a specified tariff concession. Section 269P (3) requires the CEO to make such an order if no substitutable goods were produced in Australia on the date the application was lodged.
The Customs Act imposes specific obligations on the CEO when processing a TCO application. The CEO must first ensure that the application is not for goods specified in section 269SJ, which are ineligible for TCOs. The CEO must also verify that no substitutable goods were produced in Australia on the application date, as defined by section 269D and 269E. If these criteria are met, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. Once the CEO is satisfied with the application, they must make the written order declaring the goods subject to a tariff concession.
Under the Customs Act, there are no explicit offences or penalties outlined for the breach of TCO provisions. However, any breaches of the terms of a TCO or related customs duties may result in civil or criminal consequences under other sections of the Customs Act. For example, knowingly making a false statement or representation in a customs document can lead to penalties, as outlined in sections 238A and 238B, which may include fines of up to 10,000 penalty units or imprisonment for up to 10 years, or both. Additionally, failure to comply with customs regulations may result in the seizure of goods, fines, and other enforcement actions as deemed appropriate by the Commissioner of Customs.