EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910738
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 applied for a TCO in respect of certain electrical cables traversing pay offs on 30 March 2009.
Instrument
TCO No 0910738 was made on 19 June 2009. It declares that those certain electrical cables traversing pay offs 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. 0910738 is taken to have come into force on 30 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. 0910738, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods that are not produced in Australia and for which there are no substitutable domestic products. The instrument was introduced to facilitate easier access to these goods by applying a lower rate of customs duty, thus supporting trade and potentially lowering costs for importers. The instrument was made by the Chief Executive Officer of Customs in response to an application from Olex Australia for certain electrical cables traversing pay offs. The policy objective of the instrument, as stipulated in the Customs Act, is to ensure that such concessions are granted only if no substitutable goods are produced domestically and to encourage trade by reducing the financial burden on importers.
The instrument was effective from the date the application was lodged, which was 30 March 2009, and it was formally registered on 19 June 2009. No submissions opposing the tariff concession were received during the consultation period, and the instrument does not adversely affect the rights of any person except to the benefit of importers who can now apply for a refund of duty on goods imported since the effective date. This instrument exemplifies the legislative intent to streamline customs processes and support the importation of non-domestically produced goods, thereby facilitating smoother trade operations.
Scope and Application
The Tariff Concession Instrument No. 0910738 under the Customs Act 1901 applies to specific goods—namely certain electrical cables traversing pay-offs—for which a Tariff Concession Order (TCO) was applied by Olex Australia on 30 March 2009. The Act permits the Chief Executive Officer of Customs to grant a TCO if the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. This particular TCO applies to the goods defined in item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the customs duty rate from 5% to free. The TCO has a national reach and is effective as of the date the application was lodged, 30 March 2009. It is important to note that the TCO does not disadvantage any person or impose liabilities on anyone in respect of anything done or omitted to be done before the registration date, and it beneficially affects the rights of importers who can apply for a refund of duty on goods imported since the commencement date. The instrument does not include any stated exclusions, exemptions, or thresholds beyond those specified in the Act.
Key Provisions
The main operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0910738, pertain to the creation and enforcement of Tariff Concession Orders (TCOs) (ss 269C, 269F, 269K, 269P). Section 269F allows an application for a TCO to be made to the Chief Executive Officer of Customs (CEO) by a person for specified goods. If the CEO determines that the application complies with the core criteria, outlined in section 269C, and is not in relation to goods specified in section 269SJ, the CEO must make a written order (TCO) specifying the goods and the reduced rate of customs duty (s 269P). The TCO in this instance, No. 0910738, applies to certain electrical cables traversing pay offs and specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Customs Act 1901 imposes several obligations and requirements on parties involved with TCOs. The CEO is required to assess the validity of an application against the core criteria, particularly ensuring that no substitutable goods are produced in Australia (s 269C). Upon acceptance of a valid application, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections (s 269K). If no objections are received, the CEO must proceed to issue the TCO. The Act also requires that the rights of individuals, excluding the Commonwealth, are not adversely affected by the TCO, particularly in relation to actions taken before the TCO's effective date (s 269S).
Failure to comply with the requirements set out in the Customs Act 1901 can result in various civil and criminal consequences. While the explanatory statement does not specify criminal penalties, it is implicit that any misuse or circumvention of the TCO provisions could lead to legal action under the Act. Civil penalties might include financial penalties for non-compliance or failure to adhere to the terms of the TCO. For instance, if an entity improperly claims tariff concessions not due under the TCO, they could be subject to financial penalties or required to repay any undue benefits received.
Additionally, section 269K(1) of the Customs Act 1901 mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes there are reasons why the TCO should not be made to submit their objections to the CEO. In the case of TCO No. 0910738, the CEO did not receive any submissions in response to this invitation, which likely facilitated the smooth issuance of the TCO. This transparency and consultation process are crucial to ensuring that all stakeholders have an opportunity to voice their concerns and that the TCO is made fairly and in accordance with the law.