EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608793
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.
Kroll Heaters Australia applied for a TCO in respect of certain air heaters on 22 May 2006.
Instrument
TCO No 0608793 was made on 4 August 2006. It declares that those certain 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 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. 0608793 is taken to have come into force on 22 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. 0608793, made under the Customs Act 1901, was enacted to address the issue of applying for tariff concessions on specific goods, in this case certain air heaters, where no substitutable goods are produced in Australia. This legislation was introduced to facilitate a streamlined process for granting tariff concessions, which can significantly reduce the duty burden on importers of specified goods, provided they meet the criteria outlined in the Act. The instrument was initiated by Kroll Heaters Australia, who applied for the concession on 22 May 2006. The Chief Executive Officer of Customs assessed the application and determined that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. Consequently, the instrument was registered on 4 August 2006, declaring that the specified air heaters are subject to a 0% duty rate instead of the general 5% rate. This legislative action aims to provide economic benefits to importers by reducing the customs duty on these particular goods, thereby encouraging their importation.
Scope and Application
The Tariff Concession Instrument No. 0608793, made under the Customs Act 1901, applies to certain air heaters and the companies or entities that import these goods into Australia. This legislation is part of a scheme under which Tariff Concession Orders (TCOs) may be made to allow for a lower rate of customs duty on specific goods, provided certain criteria are met. The application of the TCO is contingent on the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia and that the application fulfils the core criteria set out in the Customs Act. The instrument extends to the Commonwealth jurisdiction, affecting the importation of the specified goods across Australia. While the TCO benefits importers by reducing their duty rates, it does not impose any liabilities or disadvantage any person other than the Commonwealth, including those who may have imported goods prior to the order's effective date. The instrument also includes provisions for publication and consultation to ensure transparency and fairness in its application.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0608793 under the Customs Act 1901 pertain to the application, assessment, and issuance of a Tariff Concession Order (TCO). Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and does not involve goods specified in section 269SJ, which cannot be subject to a TCO, the CEO must decide if the application meets the core criteria (section 269C). If these criteria are met, the CEO is mandated to issue a written order, which is the TCO, specifying that the goods in question are subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes several obligations and requirements on parties involved in the TCO process. Firstly, the CEO must ensure that the application does not involve goods that are specified in section 269SJ and must verify that no substitutable goods are produced in Australia at the time of the application (section 269C). This verification is critical to determining whether the application meets the core criteria. Additionally, upon accepting a valid TCO application, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit any objections or reasons why the TCO should not be made (subsection 269K(1)). Furthermore, the CEO must ensure that the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before the TCO's effective date (subsection 269S(1)).
There are specific consequences and penalties outlined in the Act for breaches or non-compliance with the provisions. Although the Act does not explicitly state penalties for failing to meet the core criteria or making a TCO in non-compliance, breaches of related customs regulations or laws could potentially incur civil or criminal penalties. Under section 126 of the Regulations, there are provisions for the refund of duty on goods imported after the effective date of the TCO, which provides a clear benefit to importers who comply with the TCO. However, any misuse of the TCO or failure to adhere to the conditions set by the Act could lead to further legal ramifications, including fines or other civil penalties as prescribed by relevant customs laws.
Overall, Tariff Concession Instrument No. 0608793 serves to streamline the process of applying for and obtaining tariff concessions, ensuring that the criteria are met, and providing clarity on the rights and obligations of the parties involved. The Act ensures that the process is transparent, with opportunities for consultation and objections, thereby maintaining fairness and compliance in the application of tariff concessions.