EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605479
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.
Collex Pty Ltd applied for a TCO in respect of certain heat exchanger bundles cleaners on 22 March 2006.
Instrument
TCO No 0605479 was made on 9 June 2006. It declares that those certain heat exchanger bundles cleaners 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. 0605479 is taken to have come into force on 22 March 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 Customs Act 1901 was enacted to provide a comprehensive framework for the regulation of customs duties and border controls in Australia. In particular, Part XVA of the Act, which was introduced to address the need for a flexible mechanism to provide tariff concessions, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply lower rates of customs duty to specific goods, provided that certain criteria are met. Tariff Concession Instrument No. 0605479 was enacted in 2006 in response to an application by Collex Pty Ltd for a TCO on certain heat exchanger bundles cleaners. The objective of this instrument was to provide a tariff concession for these goods, reducing the duty rate from the general 5% to 0%. The instrument was created following a process of consultation and review, as required by the Act, and it came into force on the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0605479, made under the Customs Act 1901, applies to specific goods, namely certain heat exchanger bundles cleaners, as designated by the Chief Executive Officer of Customs. The act of creating this instrument is available to any person who meets the core criteria outlined in the Act, particularly when no substitutable goods are produced in Australia in the ordinary course of business. This concession is intended to benefit importers by providing a zero percent duty rate on these goods, which contrasts with the general rate of 5% as specified in Schedule 4 to the Customs Tariff Act 1995. The instrument is effective from 22 March 2006, the date on which the application was lodged, and does not impose any liabilities on any person nor affect the rights of any person other than the Commonwealth. The CEO was required to publish a notice in the Gazette inviting any interested parties to lodge a submission if they believed the concession should not be made, but no such submissions were received. This instrument extends the application of the Customs Act by providing a specific tariff concession for these goods.
Key Provisions
The primary provisions of Tariff Concession Instrument No. 0605479 under the Customs Act 1901 (section 269P(3)) relate to the issuance of Tariff Concession Orders (TCOs) for specific goods. When the Chief Executive Officer of Customs (CEO) is satisfied that an application for a TCO meets the core criteria, as outlined in section 269C, the CEO must make a written order declaring the goods subject to the TCO and specifying the applicable tariff item (section 269P(3)). In this instance, Instrument 0605479 was issued on 9 June 2006, declaring that certain heat exchanger bundles cleaners are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995. This means the general duty rate of 5% is reduced to 0% for these goods.
The obligations imposed by this Act on the relevant parties are centred around the application and assessment process for TCOs. When an application is lodged under section 269F, the CEO must determine whether it meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO determines that the application meets the criteria, they are required to make a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received, and the TCO was issued.
Under the Customs Act 1901, breaches of the provisions concerning TCOs can result in both civil and criminal penalties. While the specific penalties are not detailed in the Explanatory Statement, it is known that the Act provides for enforcement measures to ensure compliance. The CEO has the authority to investigate and take action against any party that fails to adhere to the requirements of the TCOs or engages in fraudulent activities related to the concession. Non-compliance could potentially lead to fines, imprisonment, or other civil or criminal consequences as prescribed by the relevant sections of the Customs Act 1901.
The Tariff Concession Instrument No. 0605479, which was issued on 9 June 2006, specifies that certain heat exchanger bundles cleaners are subject to a zero percent duty rate, reducing the general rate of 5%. This concession applies from the date the application was lodged, 22 March 2006, and does not affect the rights of any person except to beneficially affect importers who can apply for a refund of duty on goods imported since the TCO's effective date. The instrument ensures that no new liabilities are imposed on any person and respects pre-existing rights.