EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014564
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.
Thomson Telecom Australia applied for a TCO in respect of certain power supply units on 24 March 2010.
Instrument
TCO No 1014564 was made on 18 June 2010. It declares that those certain power supply units 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. 1014564 is taken to have come into force on 24 March 2010.
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 by the Parliament of Australia to establish a framework for managing customs and border protection within Australia. One aspect of this framework is the Tariff Concession Orders (TCO) scheme, introduced to provide relief from certain customs duties for specific goods. This scheme is detailed in Part XVA of the Act and allows the Chief Executive Officer of Customs to reduce the customs duty on goods that meet specific criteria, such as not having substitutable goods produced in Australia. The explanatory statement for Tariff Concession Instrument No. 1014564, enacted on 18 June 2010, outlines an application by Thomson Telecom Australia for a TCO concerning certain power supply units, which was approved as no substitutable goods were being produced domestically. The policy objective is to encourage the importation of goods that are not produced locally, thereby potentially lowering costs for consumers and businesses while stimulating domestic production through tariff incentives.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 1014564, pertains to the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities seeking a reduction in customs duty on specific goods through a TCO. The application process is regulated under section 269F, where an applicant must demonstrate that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. If the CEO determines that the application meets the core criteria, which are defined under sections 269C, 269B, and 269D of the Act, a TCO is issued. This instrument specifically concerns the concession of customs duty for certain power supply units applied for by Thomson Telecom Australia, which were granted a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this TCO is effective from the date the application was lodged, 24 March 2010, and does not affect pre-existing rights or impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 1014564, made under the Customs Act 1901, establishes a tariff concession for certain power supply units. This instrument is crucial as it grants a lower rate of customs duty on these units, specifically reducing it from the general rate of 5% to zero (sections 269F, 269C, 269P(3)). The application for such a tariff concession was submitted by Thomson Telecom Australia on 24 March 2010, and the concession became effective on the same day (subsection 269S(1)). The Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for the concession (section 269C).
The Act imposes specific obligations on both the applicant and the CEO. For the applicant, the main requirement is to submit a valid application that meets the core criteria, ensuring that the goods in question are not substitutable by any goods produced in Australia (section 269F). The CEO, on the other hand, is obligated to assess the application against these criteria and, if satisfied, to issue a written order declaring the goods subject to the concession (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received (subsection 269K(1)).
Should there be any breach of the provisions set out in the Customs Act 1901 or the regulations, various consequences may ensue. While the explanatory statement does not detail specific penalties, breaches of customs regulations generally can lead to civil or criminal penalties. For civil breaches, penalties may include fines, and in severe cases, criminal penalties such as imprisonment may apply. The exact penalties would depend on the nature and severity of the breach, as outlined in the broader customs legislation and regulations. The Act ensures that the rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).