EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603902
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.
Fireplace Products Australia Pty Ltd applied for a TCO in respect of certain gas fire places on 16 February 2006.
Instrument
TCO No 0603902 was made on 28 April 2006. It declares that those certain gas fire places 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. 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. 0603902 is taken to have come into force on 16 February 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. 0603902, enacted in 2006, pertains to the Customs Act 1901. This piece of legislation was introduced to provide a framework for tariff concessions on specific goods, allowing the Chief Executive Officer of Customs to reduce customs duty rates on certain imported goods based on particular criteria. The instrument was enacted by the Parliament of Australia, with the objective of facilitating trade by lowering the cost of imported goods, thereby supporting economic efficiency and consumer choice. In the case of Fireplace Products Australia Pty Ltd, the instrument was applied to certain gas fireplaces, reducing their duty rate from 5% to 0%, provided no substitutable goods were produced in Australia at the time of application. The instrument's implementation ensures that no existing rights of non-Commonwealth entities are adversely affected, and it allows for duty refunds to importers under certain conditions.
Scope and Application
The Tariff Concession Instrument No. 0603902 under the Customs Act 1901 applies to specific goods, namely certain gas fireplaces, which are the subject of an application for a Tariff Concession Order (TCO) by Fireplace Products Australia Pty Ltd. This instrument specifically targets the reduction of customs duty for these goods, applying a zero per cent duty rate instead of the general rate of five per cent. The application of this Act is limited to the goods specified in the TCO, and it does not extend to other goods or products unless they are similarly applied for and approved through the TCO process. The instrument operates under the federal jurisdiction, governed by the Commonwealth of Australia, and its reach is confined to the importation of the specified goods into Australia. Any exclusions or exemptions are inherently defined by the conditions under which the TCO is granted, such as the absence of substitutable goods produced in Australia at the time of application. The Act may also extend its application through subordinate instruments, such as regulations or further orders, which would be necessary to define specific operational details or additional criteria for TCO eligibility.
Key Provisions
The primary sections of the Tariff Concession Order No. 0603902 (section 269P(3)) declare that certain gas fireplaces are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This order was made possible under section 269C of the Customs Act 1901, which outlines the core criteria that must be satisfied for a Tariff Concession Order (TCO) to be issued. Specifically, the Chief Executive Officer (CEO) of Customs must determine that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged (section 269D and section 269E). Once these criteria are met, the CEO must issue a written TCO, as mandated by section 269P(3).
The Act imposes specific obligations on parties applying for a TCO. An applicant, such as Fireplace Products Australia Pty Ltd, must ensure their application complies with the core criteria as stipulated in sections 269C, 269D, and 269E of the Customs Act 1901. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (section 269K(1)). This ensures transparency and allows for any objections to be considered before the order is issued. The CEO must also adhere to the commencement provisions outlined in section 269S(1), which specifies that the TCO is effective from the date the application was lodged.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in civil or criminal consequences. While the explanatory statement does not detail specific penalties, breaches of customs regulations generally attract fines and potential imprisonment under section 24 of the Customs Act 1901. For instance, making false statements or evading duty can lead to substantial fines and imprisonment. The penalties for breaches can vary, but they may include fines up to a significant amount and imprisonment for periods ranging from short-term to several years, depending on the severity and intent behind the breach.