EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908359
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.
Tamco Electrical Industries applied for a TCO in respect of certain vacuum metalclad switchgear on 11 March 2009.
Instrument
TCO No 0908359 was made on 29 May 2009. It declares that those certain vacuum metalclad switchgear 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. 0908359 is taken to have come into force on 11 March 2009.
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 Tariff Concession Instrument No. 0908359, enacted in 2009, pertains to the Customs Act 1901, which establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This instrument was introduced to address the need for a more streamlined process in granting tariff concessions for specific goods, ensuring that such concessions are only provided when there are no substitutable goods produced in Australia. The policy objective is to provide economic benefits to importers by potentially reducing the customs duty on certain goods, as long as they meet the criteria set out in the Act.
This instrument was enacted by the relevant federal authority as per the provisions of the Customs Act 1901, and it aims to facilitate tariff concessions for goods where no suitable domestic alternatives exist, thereby promoting trade and economic efficiency. The instrument came into effect on the date the application was lodged, which in this case was 11 March 2009. It ensures that the rights of importers are protected and that no existing liabilities are imposed on any party due to the issuance of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0908359, made under the Customs Act 1901, applies to specific goods, namely certain vacuum metalclad switchgear, for which Tamco Electrical Industries applied on 11 March 2009. The instrument was issued on 29 May 2009, declaring these goods subject to a tariff concession order (TCO) under which they are to be treated as if they fall under item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby attracting a duty rate of free instead of the general rate of 5%. This concession applies to the goods from the date the application was lodged, 11 March 2009. The TCO does not affect any existing rights of persons other than the Commonwealth and does not impose any new liabilities on any person. However, importers of these goods can apply for a refund of duty paid on imports since the effective date of the TCO. The instrument does not specify exclusions or exemptions beyond the goods listed and follows the requirements of the Customs Act 1901 for making such orders.
Key Provisions
The Tariff Concession Order (TCO) No. 0908359, which was made under the Customs Act 1901, specifically targets certain vacuum metalclad switchgear. Section 269P(3) of the Act outlines the procedure for the Chief Executive Officer (CEO) of Customs to make a TCO when an application meets the core criteria, which include the absence of substitutable goods produced in Australia. As per the Act, the CEO must declare the goods subject to the TCO as being applicable to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, thereby granting a tariff concession. This particular TCO reduces the duty on the specified switchgear from a general rate of 5% to a concessional rate of free.
The obligations under this legislation require applicants, such as Tamco Electrical Industries, to submit a TCO application detailing the goods in question and satisfying the core criteria. The CEO has the duty to review these applications against the specified criteria and must publish a notice in the Gazette inviting public submissions if the application is deemed valid. Section 269K(1) mandates this publication to allow interested parties to voice any objections. If no submissions are received, the CEO proceeds to make the TCO as per Section 269P(3). This process ensures transparency and allows for public input before the concession is granted.
Non-compliance or misuse of the TCO provisions could result in legal repercussions. Section 269T of the Customs Act 1901 stipulates that fraudulent applications or misrepresentation in TCO applications can lead to criminal charges. Penalties for such offences can include fines up to $22,200 for individuals and significantly higher amounts for corporations, reflecting the seriousness of the breach. Additionally, any person found to have deliberately provided false information to obtain a tariff concession could face imprisonment, further underscoring the legal consequences of non-compliance.