EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913051
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.
Adaptaflex Pty Ltd applied for a TCO in respect of certain electrical conduit fittings on 20 April 2009.
Instrument
TCO No 0913051 was made on 10 July 2009. It declares that those certain electrical conduit fittings 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. 0913051 is taken to have come into force on 20 April 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 Customs Act 1901 was enacted to provide for the regulation of the import and export of goods, among other things. The Act, as amended, introduces a scheme where Tariff Concession Orders (TCOs) can be made to provide a lower rate of customs duty on specified goods. This was introduced to address the need for economic flexibility in the importation of goods that are not produced domestically, thereby encouraging trade and competition. The Tariff Concession Instrument No. 0913051, made under the authority of the Customs Act, was introduced on 10 July 2009 by the Chief Executive Officer of Customs. This specific instrument, concerning electrical conduit fittings, was made following an application by Adaptaflex Pty Ltd, with the aim of ensuring that these goods are subject to a zero percent duty rate instead of the general 5 percent duty. This legislative action was intended to support the policy objective of facilitating smoother and more cost-effective importation processes for certain goods, ultimately benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Tariff Concession Instrument No. 0913051 under the Customs Act 1901 applies to individuals or entities that have applied for a Tariff Concession Order (TCO) in relation to specific goods, enabling them to benefit from reduced customs duty rates. The instrument specifically addresses the application by Adaptaflex Pty Ltd for certain electrical conduit fittings, which, as per the order, are now subject to a duty rate of free, down from the general rate of 5%. The Act applies to those who seek tariff concessions for goods that are not produced in Australia and have no substitutable goods domestically available. The geographic and jurisdictional reach of this legislation is national, extending across Australia as it falls under the Commonwealth's purview. Any exclusions or exemptions are delineated in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The scope of the Act may be further refined through subordinate instruments, although the primary legislation itself does not extend or restrict application beyond its stated provisions.
Key Provisions
The main sections of this legislation, specifically Tariff Concession Instrument No. 0913051 under the Customs Act 1901, provide the framework for the creation and application of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application meets the core criteria specified in section 269C, and does not relate to goods excluded under section 269SJ, the CEO is required to make a written order, known as a TCO, declaring that the goods in question are subject to a lower rate of duty (section 269P(3)). This particular TCO, No. 0913051, was made on 10 July 2009 and applies to certain electrical conduit fittings, setting the duty rate at free instead of the general rate of 5%.
Entities and individuals governed by this legislation must adhere to the obligations set forth by the Customs Act 1901. When an application for a TCO is received, the CEO must ensure that it does not pertain to goods that are specified in section 269SJ of the Act and verify that no substitutable goods are produced in Australia on the date the application was lodged (section 269C). If these criteria are met, the CEO must make a TCO and publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). For this specific TCO, no submissions were received. The TCO comes into force on the date the application was lodged, which in this case was 20 April 2009, as outlined in subsection 269S(1).
Failure to comply with the requirements of this legislation may result in civil or criminal consequences. While the specific penalties are not detailed in the explanatory statement, the Customs Act 1901 and related regulations likely provide for penalties for non-compliance. Typically, such penalties can include fines and, in more severe cases, imprisonment. For instance, under the Customs Act, penalties for incorrect classification of goods or fraudulent claims can be substantial, with fines and imprisonment terms depending on the severity and intent of the breach. Importers must also be aware that while the TCO does not impose any liabilities for actions taken before its registration, any actions taken in reliance on the TCO after its effective date must comply with its provisions.