EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616669
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.
Speed Heat Australia Pty Ltd applied for a TCO in respect of certain underfloor heating cables on 04 September 2006.
Instrument
TCO No 0616669 was made on 24 November 2006. It declares that those certain underfloor heating cables 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 free.
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. 0616669 is taken to have come into force on 04 September 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 Parliament of Australia, established a framework for tariff concession orders (TCOs) to provide preferential customs duty rates for certain imported goods. This legislation was introduced to address the gap in providing lower duty rates for imported goods that are not produced in Australia and do not have substitutable Australian-made alternatives. The policy objective is to encourage the importation of specific goods that are not domestically produced, thereby benefiting consumers and industries that rely on these imports. Tariff Concession Order No. 0616669, made on 24 November 2006, is an example of this legislative framework in action, granting free duty on certain underfloor heating cables applied for by Speed Heat Australia Pty Ltd, effective from 4 September 2006, as no substitutable goods were produced in Australia. This order aligns with the Act's aim to foster competitive markets by reducing import costs for specific goods.
Scope and Application
The Tariff Concession Instrument No. 0616669 under the Customs Act 1901 applies to an entity, specifically Speed Heat Australia Pty Ltd, which applied for a Tariff Concession Order (TCO) for certain underfloor heating cables. The Act's jurisdiction extends nationally within Australia, allowing the Chief Executive Officer of Customs to grant concessions that lower customs duties on specified goods. The TCO applies to goods that meet the core criteria as outlined in sections 269C and 269D, specifically that no substitutable goods are produced in Australia in the ordinary course of business. This instrument exempts the specified underfloor heating cables from the general 5% duty rate, applying a free rate instead. The TCO’s commencement date is the day the application was lodged, which is 04 September 2006, and it does not affect the rights or impose liabilities on any person other than the Commonwealth for actions taken before its registration. Importers can apply for duty refunds on goods imported since the effective date of the TCO, which also coincides with the application date.
Key Provisions
The main operative sections of this legislation, namely Tariff Concession Order No. 0616669, are established under the Customs Act 1901 (section 269F) and detail the process for the application and assessment of Tariff Concession Orders (TCOs). If an application is lodged for a TCO, and the Chief Executive Officer of Customs (CEO) is satisfied that the application is valid and meets the core criteria outlined in section 269C of the Act, the CEO must make a written order that applies a lower rate of customs duty to the specified goods (section 269P(3)). In this particular case, TCO No. 0616669 applies to certain underfloor heating cables, reducing the duty from 5% to free (section 269S(1)).
The Customs Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO is assessed against the core criteria specified in the Act, particularly ensuring that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application (section 269C). The CEO also has a duty to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). Additionally, the Act requires that the rights of importers are beneficially affected, and they may apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
Failing to comply with the requirements of the Customs Act can result in various consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of customs legislation generally carry significant penalties. Under Australian law, contraventions of customs duties can result in both civil and criminal penalties. Civil penalties may include fines, with the maximum penalty often tied to the value of the goods or the amount of duty evaded. Criminal penalties can include imprisonment, with the severity depending on the circumstances of the offence. For instance, section 236 of the Crimes Act 1914 provides that a person can be fined or imprisoned for engaging in activities that contravene customs laws. The explanatory statement does not specify these penalties for the TCO in question, but they are applicable under the broader customs legislation.