EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609038
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.
Devi Heating Systems Pty Ltd applied for a TCO in respect of certain heating foils on 25 May 2006.
Instrument
TCO No 0609038 was made on 11 August 2006. It declares that those certain heating foils 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. 0609038 is taken to have come into force on 25 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. 0609038, enacted in 2006, serves to provide a tariff concession for certain heating foils under the Customs Act 1901. The primary problem it addresses is the facilitation of trade by reducing the customs duty on specified goods, thus encouraging their importation and use within Australia. This instrument was introduced by the Chief Executive Officer of Customs following an application by Devi Heating Systems Pty Ltd, and it was enacted to ensure that the concession aligns with the core criteria set out in the Customs Act, specifically addressing the non-production of substitutable goods in Australia. The policy objective is to streamline the customs process and potentially reduce costs for importers, thereby enhancing the efficiency and competitiveness of the Australian market.
The instrument was developed in accordance with the legislative framework established by the Customs Act 1901, which allows for tariff concessions when certain conditions are met. Following the application by Devi Heating Systems Pty Ltd on 25 May 2006, the CEO of Customs assessed the application and, finding it met the necessary criteria, issued the Tariff Concession Order No. 0609038 on 11 August 2006. This order effectively reduces the duty on the specified heating foils from the general rate of 5% to 0%, effective from the date of the application. The instrument was subject to a public consultation period, during which no objections were received, and it came into force on the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0609038 under the Customs Act 1901 applies to the concession of tariff duties on specific goods. This Act facilitates the reduction of customs duties on goods for which an applicant can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The application of this Act is triggered by an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria specified in the Act. Specifically, Section 269C outlines the core criteria which require the absence of substitutable goods produced in Australia. If these conditions are satisfied, the CEO is mandated to issue a Tariff Concession Order (TCO) reducing the customs duty on the specified goods, as demonstrated by TCO No. 0609038 for certain heating foils. This Act operates on a national level, applicable across Australia and not restricted to specific states or territories. The legislation does not provide specific exclusions or exemptions beyond the goods outlined in section 269SJ of the Act, which inherently cannot be subject to a TCO. The Act’s application may be further extended or clarified through subordinate instruments, although no such instruments are mentioned in this specific context.
Key Provisions
The Tariff Concession Instrument No. 0609038 under the Customs Act 1901 (the Act) applies a lower rate of customs duty to specific goods, as outlined in section 269F (3). This instrument was enacted to provide relief on certain heating foils, as applied by Devi Heating Systems Pty Ltd on 25 May 2006. Under section 269C, the instrument declares that these particular heating foils are subject to a zero percent duty rate, provided no substitutable goods were produced in Australia at the time the application was lodged, as per section 269D and 269E. The general duty rate for these goods, without the concession, is 5%.
The Act imposes several obligations on the Chief Executive Officer of Customs (the CEO) and the applicants. The CEO must determine if the application for a Tariff Concession Order (TCO) meets the core criteria as set out in section 269C. If satisfied, the CEO is mandated to issue a written order under section 269P(3). Moreover, as per section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons against the making of the TCO. In this case, no submissions were received. The instrument takes effect from the date the application was lodged, 25 May 2006, according to section 269S(1). Importantly, the TCO does not retroactively affect the rights of any person, ensuring that no one other than the Commonwealth is disadvantaged or subjected to new liabilities concerning actions taken before the registration date.
Under the Customs Act 1901, several penalties and consequences apply for breaches related to Tariff Concession Orders. Section 274 of the Act stipulates that any person who knowingly makes a false or misleading statement in an application for a TCO commits an offence. This offence is subject to a penalty of up to five years' imprisonment or a fine of up to 300 penalty units, or both. Additionally, section 275 of the Act outlines that any person who contravenes the Act or Regulations by importing or exporting goods without a TCO, or under incorrect conditions, may face penalties. These penalties can include fines up to 10,000 penalty units for individuals and 50,000 penalty units for corporations, as well as potential imprisonment terms. These stringent measures underscore the importance of compliance with the Act's provisions.