EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413762
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.
Rohlig Australia Pty Ltd applied for a TCO in respect of certain underfloor heating cables on 21 December 2004.
Instrument
TCO No 0413762 was made on 4 March 2005. It declares that those certain underfloor heating 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 3%.
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. 0413762 is taken to have come into force on 21 December 2004.
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 administration of customs and excise in Australia. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which reduce the rate of customs duty on certain goods, provided certain conditions are met. This legislative mechanism was introduced to address the need for a streamlined process to reduce customs duty on specific goods, thereby promoting trade efficiency and competitiveness. In this context, Tariff Concession Instrument No. 0413762 was issued on 4 March 2005 in response to an application by Rohlig Australia Pty Ltd for tariff concessions on underfloor heating cables. The instrument was made to ensure that these goods attract a lower rate of duty, specifically reducing it from the general rate of 5% to 3%, as no substitutable goods were produced in Australia at the time of application. The policy objective underpinning this measure is to facilitate the import of these goods, thereby benefiting importers and potentially consumers, without imposing any new liabilities or disadvantaging existing rights holders.
Scope and Application
The Customs Act 1901, particularly Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can result in reduced customs duty rates on specified goods. The application for a TCO can be submitted by any person, provided the goods in question are not those listed in section 269SJ of the Act, which excludes certain goods from tariff concessions. A TCO will be granted if the CEO determines that no substitutable goods are being produced in Australia at the time of application, as defined in section 269C of the Act. The geographic scope of this legislation is national, applying across Australia as it pertains to the Customs Act 1901, which is a Commonwealth Act. The application of the Act is not limited by state or territory boundaries but applies uniformly across the nation. Additionally, the Act does not disadvantage any existing rights of persons other than the Commonwealth and does not impose any new liabilities on individuals or entities. The CEO is mandated to publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO application, although in this instance, no submissions were received. The TCO becomes effective on the date the application is lodged, as stipulated in the Act, with TCO No. 0413762 effective from 21 December 2004.
Key Provisions
The Tariff Concession Instrument No. 0413762 under the Customs Act 1901 (the Act) provides a lower rate of customs duty on certain underfloor heating cables, specifically those covered by item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). This instrument was issued following an application by Rohlig Australia Pty Ltd on 21 December 2004, and it came into force on the same date (sections 269S(1) and 269K(1)). The general duty rate for these goods is 5%, but the rate is reduced to 3% under this particular Tariff Concession Order (TCO) (subsection 269P(3)).
The Act mandates certain obligations for both the Chief Executive Officer of Customs (CEO) and applicants for a TCO. For instance, the CEO must ensure that any application for a TCO does not pertain to goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Tariff (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this case, no submissions were received.
The Act also sets forth specific consequences for non-compliance. While the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration to disadvantage them or impose liabilities for actions taken before the registration date, it does provide for potential refunds of duty for importers of such goods from the date the TCO is taken to have come into force (subsection 269S(1) and paragraph 126(1)(r) of the Regulations). However, there are no explicit provisions detailing criminal or civil penalties for breaching the TCO or its associated obligations within the text provided.