EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802362
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 transmission power line parts on 11 October 2007.
Instrument
TCO No 0802362 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. 0802362 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 and established a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument addresses the gap in the customs duty regime by providing a mechanism for reducing or eliminating customs duty on certain goods that are not produced in Australia and are essential for specific industries or public services. In 2008, the Tariff Concession Instrument No. 0802362 was introduced to provide a tariff concession for certain transmission power line parts, which are critical for infrastructure and energy distribution. The policy objective of this instrument is to ensure the availability of essential goods at a reduced cost, thereby supporting industries and services that rely on these imports. The instrument was made following an application by Powerlink Queensland, and after no objections were raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0802362, issued under the Customs Act 1901, applies to specific transmission power line parts for which Powerlink Queensland made an application on 11 October 2007. This instrument, which came into effect on the same date, aims to provide tariff concessions by granting a reduced rate of customs duty on these specified goods. The legislation pertains to the process through which the Chief Executive Officer of Customs assesses applications for Tariff Concession Orders (TCOs) and determines whether the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia. The scope of this Act extends to the national level, as it is administered under the Commonwealth's customs laws. Any person or entity wishing to import the specified transmission power line parts can benefit from this concession, provided they meet the stipulated conditions. The Act does not impose any liabilities on individuals or entities, nor does it affect any pre-existing rights or obligations of parties other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically within Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through section 269F, enabling the Chief Executive Officer of Customs (CEO) to reduce customs duty rates for certain goods. When a person submits an application under section 269F, the CEO must first ascertain whether the goods are among those listed in section 269SJ, which cannot be subject to a TCO. If the goods are eligible, the CEO then determines if the application meets the core criteria outlined in section 269C. This criterion is satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for these terms are provided in sections 269D, 269E, and 269F, which help clarify what constitutes 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods.'
The obligations imposed by the Customs Act on the CEO are significant, as they require careful consideration of each application. The CEO must ensure that the application adheres to the criteria specified in section 269C and must subsequently publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit their views on whether the TCO should be granted. This process ensures transparency and provides an opportunity for stakeholders to voice their opinions. In the case of TCO No. 0802362, the CEO was satisfied that the application met the core criteria and subsequently issued the order, declaring the specified transmission power line parts as goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with a resulting duty rate of free.
Breach of the provisions of the Customs Act, including the failure to comply with the requirements for issuing a TCO, can result in serious consequences. While the explanatory statement does not explicitly detail penalties for such breaches, it is understood that violations of customs laws can lead to both civil and criminal penalties. For instance, penalties for non-compliance with customs regulations can include substantial fines and, in severe cases, imprisonment. The specific penalties would be determined based on the nature and severity of the breach, reflecting the importance of adherence to these regulatory frameworks to ensure fair and efficient trade practices.