EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607955
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 diesel stoves on 5 May 2006.
Instrument
TCO No 0607955 was made on 21 July 2006. It declares that those certain diesel stoves 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. 0607955 is taken to have come into force on 5 May 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. 0607955, enacted under the Customs Act 1901, was introduced to address the specific need for tariff concessions on certain goods, thereby facilitating lower customs duties for those goods. This legislative instrument was developed to provide relief to importers by reducing the rate of customs duty on specific items, in this case, certain diesel stoves. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with the provisions outlined in Part XVA of the Customs Act 1901, which empowers the CEO to make Tariff Concession Orders when certain conditions are met. The policy objective of this instrument is to ensure that importers benefit from reduced customs duties, provided that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. This legislative approach aims to enhance the competitiveness of imported goods in the Australian market while ensuring that the domestic industry is not adversely affected by undue tariff reductions.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who can apply a lower rate of customs duty on certain goods if specific criteria are met. These concessions are available to applicants, such as Webasto Product Australia Pty Ltd, who apply for a TCO in respect of goods that are not specified as ineligible under section 269SJ of the Act. The Act requires that, at the time of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these core criteria, a TCO is issued, as was the case for certain diesel stoves, reducing their duty from 5% to 0%. The TCO's effect is retroactive to the date of the application, meaning that it does not disadvantage or impose liabilities on any person in respect of actions taken before the order’s registration. Instead, it potentially benefits importers by allowing them to claim refunds for duties paid on the goods since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0607955, under the Customs Act 1901 (section 269F), allow for the application of Tariff Concession Orders (TCO) to goods by the Chief Executive Officer of Customs (CEO). If an application for a TCO is made in respect of goods, the CEO must consider whether it meets the core criteria (section 269C). For the application to meet these criteria, the goods in question must not have substitutable goods produced in Australia at the time of the application (section 269P(3)). If these criteria are satisfied, the CEO is required to issue a TCO, which specifies the rate of customs duty to be applied to the goods, which in this case is 0% (section 269P(3)). The TCO, once issued, is taken to have come into force on the date the application was lodged (section 269S(1)).
The Act imposes several obligations on the parties it governs. Firstly, the CEO is required to assess whether an application for a TCO meets the core criteria. This involves determining if there are any substitutable goods produced in Australia at the time of the application (section 269C). Secondly, the CEO must also publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). This notice is to be published as soon as practicable after accepting the application as valid. Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on such a person in respect of anything done or omitted to be done before the date of registration of the TCO.
Failure to comply with the provisions of the Customs Act 1901, including the issuance of TCOs, may result in civil or criminal consequences. However, the explanatory statement does not detail specific offences, penalties, or maximum penalties for breaches of the Act. The consequences of non-compliance would likely be governed by the broader provisions of the Customs Act and any associated regulations. It is also possible that penalties could be imposed under other relevant Australian laws, depending on the nature of the breach. The Act does ensure that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).