EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804764
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 coating line parts on 2 April 2008.
Instrument
TCO No 0804764 was made on 27 June 2008. It declares that those certain cable coating 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. 0804764 is taken to have come into force on 2 April 2008.
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 amended to introduce Tariff Concession Orders (TCOs) via Part XVA, allowing for reduced customs duty on specific goods. Enacted by the Parliament of Australia, this legislation aims to support Australian businesses by reducing import costs for goods that are not produced domestically. The Tariff Concession Instrument No. 0804764, enacted on 27 June 2008, applies this framework to certain cable coating line parts, setting their duty rate at free, down from the general rate of 5%. This instrument was created in response to an application by Olex Australia Pty Ltd, and no objections were received during the consultation period, ensuring the policy objective of aiding domestic industries by making imported goods more affordable is met without disadvantaging other stakeholders.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0804764, provides a mechanism for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that apply lower rates of customs duty on specified goods. This legislation is applicable to individuals or entities that apply for a TCO in respect of goods, provided those goods do not fall under the categories specified in section 269SJ of the Act. The geographic reach of this Act is national, operating within the Commonwealth of Australia, and it extends to any goods subject to a TCO within Australia's customs jurisdiction. The Act requires that the CEO consider whether the goods in question are substitutable by Australian-produced goods before granting a TCO, as outlined in sections 269C, 269D, 269E, and 269P of the Act. The TCO in question, made on 27 June 2008, declared certain cable coating line parts to be subject to free duty, effective from 2 April 2008, the date the application was lodged. The Act allows for the possibility of exclusions or exemptions via subordinate instruments, though in this specific instance, no such exclusions were applied.
Key Provisions
The main sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269K, and 269P (subsection 3). Section 269F 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 not in respect of goods specified in section 269SJ, which sets out those goods that cannot be subject to a TCO, and the application meets the core criteria set out in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made. If no submissions are received, the CEO can proceed to make the order.
Under the Customs Act 1901, the CEO has obligations to ensure that the application for a TCO is valid and not in respect of prohibited goods, as outlined in section 269SJ. The CEO must also check that the core criteria are met, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged, as stipulated in section 269C. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO, as per section 269K. If no submissions are received, the CEO is then required to make the TCO.
Failure to comply with the provisions of the Customs Act 1901 concerning TCOs can lead to various consequences. The act does not explicitly state penalties for breaches, but it does specify that the TCO does not affect the rights of a person (other than the Commonwealth) to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. Importers, however, will have their rights beneficially affected as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any liabilities on any person.