EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602275
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.
Webasto Product Australia Pty Ltd applied for a TCO in respect of certain marine air heaters on 16 January 2006.
Instrument
TCO No 0602275 was made on 24 March 2006. It declares that those certain marine air heaters 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. 0602275 is taken to have come into force on 16 January 2006.
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. 0602275, enacted in 2006, amends the Customs Act 1901 to address a gap in the tariff concession scheme for certain marine air heaters. The instrument was introduced to provide relief to importers of these goods by offering a concession on the customs duty that would otherwise apply. This was achieved through the establishment of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs, following an application by Webasto Product Australia Pty Ltd. The primary policy objective behind this legislation is to support the importation of goods that are not produced domestically, thereby facilitating trade and potentially reducing costs for importers.
The Australian Parliament enacted this legislation to provide a mechanism for the CEO to assess and approve TCO applications, ensuring that such orders are only granted when no substitutable goods are produced in Australia. In this specific case, the CEO determined that no such goods were produced locally and subsequently issued TCO No. 0602275, which came into force on the date of the application, 16 January 2006. This instrument ensures that the rights of importers are protected and potentially enhanced, while imposing no new liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0602275 applies to the application process for Tariff Concession Orders under the Customs Act 1901. This Act facilitates the concession of lower rates of customs duty on specific goods as outlined in the Tariff Concession Orders. The Act applies to any person or entity that wishes to apply for a Tariff Concession Order for goods that are not specified in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a Tariff Concession Order. The Act applies to the conduct of applying for such orders and to the transactions involving the importation of the goods that become subject to the order. The geographic reach of this legislation is national, as it is an instrument under the Commonwealth of Australia's Customs Act 1901. The Act does not specify exclusions or exemptions other than those listed in section 269SJ, but it does provide for the possibility of subordinate instruments to further define certain terms and conditions. The application process and the conditions under which these orders can be made are further detailed in subordinate instruments and regulations, which extend or clarify the primary legislation.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269F, 269P(3), and 269SJ) establish the framework under which Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply for a TCO for certain goods, provided that these goods are not specified in section 269SJ as ineligible. If the CEO determines that the application meets the core criteria outlined in section 269C—specifically, that no substitutable goods were produced in Australia on the day the application was lodged—the CEO must issue a TCO. This order declares that the specified goods are subject to a lower rate of customs duty, as detailed in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved include the requirement for applicants to ensure that their applications meet the core criteria set out in section 269C. The CEO must review the applications to verify that the goods in question are not specified in section 269SJ and that no substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this instance, no submissions were received. Finally, the CEO must ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth in respect of actions taken before the date of registration.
Breaches of the provisions of this Act, including failure to comply with the requirements for making a TCO application or non-compliance with the terms of a TCO, may result in civil or criminal consequences. The specific offences and penalties are not detailed in this explanatory statement, but generally, under the Customs Act 1901, breaches can lead to fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant provisions in subsidiary legislation or other applicable laws.