EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616282
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.
Alcan Gove Development P/L applied for a TCO in respect of certain air heaters on 30 August 2006.
Instrument
TCO No 0616282 was made on 17 November 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. 0616282 is taken to have come into force on 30 August 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, enacted by the Australian Parliament, provides a framework for the regulation of customs duties and tariffs. Specifically, Part XVA of this Act enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce customs duties on certain imported goods under certain conditions. The policy objective is to provide relief to importers by reducing the duty payable on goods, provided that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0616282, made on 17 November 2006, is an example of this mechanism in action, where a TCO was granted to Alcan Gove Development P/L for certain air heaters, reducing the duty on these goods from 5% to 0%. This instrument was made following an application by Alcan Gove Development P/L on 30 August 2006, and it was effective from that date. No submissions were received in opposition to the TCO, and it was made in accordance with the requirement to consult the public. The TCO ensures that no existing rights or liabilities are adversely affected for anyone other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia and includes provisions for Tariff Concession Orders (TCOs) to reduce or eliminate customs duty on certain goods under specific circumstances. This legislation allows for applications to be made to the Chief Executive Officer of Customs by any individual or entity that meets the criteria set forth in section 269C of the Act, which includes the condition that no substitutable goods are produced in Australia at the time the application is lodged. The geographic reach of this legislation is national, applying across all states and territories within Australia, as it is a Commonwealth Act. The application of this legislation can be extended or restricted through subordinate instruments, which may further define terms such as "substitutable goods" or "ordinary course of business." It is important to note that the application of TCOs is contingent upon the absence of substitutable goods produced in Australia, and any exclusions are specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The commencement of a TCO is retroactive to the date of application lodgement, and it does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 0616282, are sections 269C, 269P, and 269S, which establish the criteria for Tariff Concession Orders (TCOs) and their effect. Section 269C (2) stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, section 269P(3) mandates that the CEO must issue a written order (a TCO) declaring that the goods subject to the application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S specifies that a TCO is effective from the date the application for the TCO was lodged. In this case, the TCO for certain air heaters, declared under item 50 of Schedule 4, has a duty rate of 0%, reducing from the general rate of 5%.
The Act imposes obligations on the CEO to assess TCO applications based on the criteria in section 269C. If the CEO determines that the application meets the core criteria, they must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO, as per subsection 269K(1). If no submissions are received, the CEO must proceed to issue the TCO. The CEO must also ensure that the TCO does not adversely affect the rights of any person, except the Commonwealth, as of the date of registration and does not impose liabilities on any person in respect of actions taken before the TCO was registered, as per section 269S(1).
Failure to comply with the requirements of the Customs Act 1901 in relation to TCOs can result in significant consequences. Breaches of the Act can lead to both civil and criminal penalties. Civil penalties may include fines and other monetary penalties as prescribed by the Act. Criminal penalties for serious breaches can include imprisonment and fines. The maximum penalties will depend on the specific nature and severity of the offence. The CEO has the authority to enforce these penalties and to take legal action against entities or individuals found to be in breach of the Act.
In the context of this specific TCO, there are no immediate obligations on importers or other parties beyond those generally imposed by the Customs Act 1901. Importers may apply for a refund of duty on goods imported since the TCO was taken to have come into force, as per paragraph 126(1)(r) of the Regulations. However, the Act ensures that the TCO does not impose any liabilities on any person. The TCO does not affect the rights of a person, except the Commonwealth, in any way that would disadvantage them or impose liabilities for actions taken before the TCO was registered.