EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514070
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.
GEA Energietechnik Australia Pty Ltd applied for a TCO in respect of certain air cooled steam condensers on 12 October 2005.
Instrument
TCO No 0514070 was made on 15 August 2006. It declares that those certain air cooled steam condensers 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 0%.
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. One submission objecting to the TCO application was received from Jord International.
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. 0514070 is taken to have come into force on 12 October 2005.
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. 0514070, enacted under the Customs Act 1901, was introduced to address the issue of providing tariff concessions for specific goods that are not produced in Australia. This legislation allows the Chief Executive Officer of Customs to apply lower rates of customs duty to certain imported goods if it is determined that no substitutable goods are produced domestically. The policy objective is to support industries by making imported goods more competitive with domestic products, thereby encouraging economic efficiency and consumer choice. The instrument was made on 15 August 2006, following an application by GEA Energietechnik Australia Pty Ltd for tariff concessions on certain air cooled steam condensers, which were granted a duty rate of 0% instead of the general rate of 5%. The process involved public consultation, as required by the Act, with submissions considered before the final decision was made.
Scope and Application
The Tariff Concession Instrument No. 0514070 under the Customs Act 1901 applies to the specific category of air cooled steam condensers for which GEA Energietechnik Australia Pty Ltd made an application for a Tariff Concession Order (TCO). This Act, which operates at a Commonwealth level, provides a framework for the CEO of Customs to grant tariff concessions on imported goods, thereby reducing the customs duty rate on those goods. The instrument came into effect on 12 October 2005, the date the application was lodged, and it provides a zero rate of duty for these specific condensers, reducing the general rate of 5% applied to such goods. The application process requires the CEO to be satisfied that no substitutable goods are produced in Australia, thereby meeting the core criteria stipulated in the Act. The application is subject to public scrutiny, as the CEO must publish a notice in the Gazette inviting submissions from interested parties, and in this instance, an objection was lodged by Jord International. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The Tariff Concession Instrument No. 0514070, under the Customs Act 1901, pertains to Tariff Concession Orders (TCO) that reduce customs duty on specified goods. This particular instrument, issued on 15 August 2006, concerns certain air cooled steam condensers, reducing their customs duty rate from 5% to 0%. This concession is applied because, on the date of application on 12 October 2005, no substitutable goods were produced in Australia in the ordinary course of business, satisfying the core criteria set out in section 269C of the Act.
Entities or individuals applying for a TCO must ensure their applications comply with the core criteria outlined in section 269C, which necessitates that no substitutable goods were produced in Australia on the date of application. The CEO of Customs must also follow the procedural requirements, including publishing a notice in the Gazette (subsection 269K(1)) after accepting a TCO application as valid, inviting submissions from interested parties. In this instance, the CEO received one submission objecting to the TCO application from Jord International.
The Act imposes several obligations on the parties involved. The CEO must diligently assess whether the application meets the core criteria before making a decision to issue a TCO. The applicant must provide sufficient information and evidence to support their claim that no substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette, inviting objections or submissions, ensuring transparency and due process. The concession does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person except the Commonwealth.
Failure to comply with the provisions of the Customs Act 1901 concerning TCOs can result in legal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Act could potentially lead to civil or criminal sanctions under other sections of the Act. The maximum penalties would depend on the nature and severity of the breach, but could include fines or imprisonment as stipulated in other relevant sections of the Act.