EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918400
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.
Wiretek Australia applied for a TCO in respect of certain computer power cables on 29 May 2009.
Instrument
TCO No 0918400 was made on 21 August 2009. It declares that those certain computer power cables 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. 0918400 is taken to have come into force on 29 May 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, enacted by the Australian Parliament, provides a framework for the regulation of imports and exports through the imposition of tariffs. To address the need for flexibility in tariff application, particularly in cases where certain goods are not produced domestically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This mechanism ensures that when no substitutable goods are produced in Australia, a lower rate of customs duty can be applied to specific imported goods. The policy objective is to facilitate trade and potentially reduce costs for importers by providing tariff concessions where appropriate. The explanatory statement for Tariff Concession Instrument No. 0918400, made on 21 August 2009, outlines the process by which Wiretek Australia successfully applied for a TCO for certain computer power cables, resulting in a tariff reduction from 5% to free. The instrument was effective from 29 May 2009, and no submissions opposing the TCO were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0918400 under the Customs Act 1901 applies to goods specified in the instrument, namely certain computer power cables, and it provides a concession by setting the rate of duty at free, as opposed to the general rate of 5%. The Act applies to the Chief Executive Officer of Customs who is responsible for making Tariff Concession Orders (TCOs) if they are satisfied that the application meets certain core criteria, including that no substitutable goods were produced in Australia in the ordinary course of business. The instrument is effective on the date the application was lodged, 29 May 2009, and it does not impose any liabilities on persons other than the Commonwealth or affect any existing rights as at the date of registration. The instrument extends the application of the Act by providing a tariff concession for the specified goods, and it operates nationally within Australia. The instrument does not apply to goods specified in section 269SJ of the Act which cannot be subject to a TCO. Any further details or modifications to the application of the Act may be included in subordinate instruments made under the authority of the Customs Act 1901.
Key Provisions
The Tariff Concession Order No. 0918400, made under the Customs Act 1901, provides a significant reduction in customs duty for certain computer power cables. This TCO was made on 21 August 2009, following an application by Wiretek Australia on 29 May 2009. According to section 269P(3) of the Act, the Chief Executive Officer of Customs (CEO) must make this order if satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The general rate of duty on these goods is 5%, but the TCO reduces this rate to free, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
Under the Customs Act 1901, specific obligations are imposed on the parties involved with the TCO. Section 269C of the Act outlines that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B further defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. The CEO is required to publish a notice in the Gazette under subsection 269K(1) of the Act, inviting submissions from interested parties if they believe the TCO should not proceed. In this instance, no submissions were received, allowing the CEO to proceed with the TCO.
Failure to comply with the provisions of the Customs Act 1901 can result in significant legal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs legislation can generally lead to civil or criminal penalties, including fines and imprisonment. The exact penalties depend on the nature and severity of the breach, as outlined in the Act and relevant regulations. Importers should be aware that while the TCO benefits their rights, it does not affect pre-existing liabilities or rights of other parties under the Act.
The TCO No. 0918400 came into force on the day the application was lodged, 29 May 2009, under subsection 269S(1) of the Act. This date ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that it does not disadvantage or impose liabilities on any parties other than the Commonwealth.