EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608287
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.
Maurice Kemp and Associates applied for a TCO in respect of certain heating and/or cooling cabinets on 12 May 2006.
Instrument
TCO No 0608287 was made on 21 July 2006. It declares that those certain heating and/or cooling cabinets 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. 0608287 is taken to have come into force on 12 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. 0608287, enacted in 2006, is a legislative instrument under the Customs Act 1901. It was introduced to provide a lower rate of customs duty on certain goods, specifically certain heating and/or cooling cabinets, by way of a Tariff Concession Order (TCO). The instrument was made by the Chief Executive Officer of Customs (CEO) under section 269F of the Act after a successful application by Maurice Kemp and Associates, and it addresses the problem of potentially higher duty rates on these goods by setting the rate at 0% instead of the general rate of 5%. The CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The Tariff Concession Instrument is an administrative measure designed to facilitate trade by reducing the cost of importing these specific goods.
Scope and Application
The Tariff Concession Instrument No. 0608287 under the Customs Act 1901 applies specifically to the goods identified in the application made by Maurice Kemp and Associates, namely certain heating and/or cooling cabinets. This instrument is designed to lower the rate of customs duty on these goods from the general rate of 5% to 0%, provided that the application meets the core criteria outlined in the Act, specifically that no substitutable goods were produced in Australia at the time of the application. This concession is applicable nationally across Australia and is effective from the date the application was lodged, 12 May 2006. The instrument does not affect any existing rights or impose any liabilities on persons other than the Commonwealth for actions taken prior to its registration. It is important to note that this concession does not extend to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269F, and 269P(3)) detail the conditions under which a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (CEO). Specifically, section 269F allows a person to apply for a TCO in respect of goods, and section 269C sets out the core criteria for the CEO to consider when deciding whether to make the order. According to section 269P(3), if the CEO is satisfied that the application meets the core criteria, they must make a written order, which is the TCO itself. This order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the rate of customs duty on these goods.
The Act imposes several obligations and requirements on the parties involved. For instance, section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must invite any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. Additionally, section 269S(1) stipulates that a TCO comes into force on the day the application for the TCO was lodged, meaning that the concessional tariff rate applies from the date of application. In this case, TCO No. 0608287 is taken to have come into force on 12 May 2006, the date on which the application was made.
In terms of breaches and penalties, the Customs Act 1901 does not explicitly state penalties for non-compliance with the TCO provisions. However, breaches of customs regulations generally can result in various civil and criminal consequences. Civil penalties may include fines, with the exact amount depending on the severity and nature of the breach. Criminal penalties can include imprisonment, reflecting the seriousness of the violation. Given that the TCO is designed to streamline and regulate the importation process, any failure to adhere to its terms could lead to enforcement actions under the broader customs laws, although specific penalties for TCO non-compliance are not outlined in the explanatory statement.
The TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration. This means that while the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, the TCO does not create any new liabilities or disadvantage any third parties.