EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700390
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.
Heat Treatment Australia applied for a TCO in respect of certain vacuum aluminium brazing furnace on 14 September 2007.
Instrument
TCO No 0700390 was made on 16 November 2007. It declares that those certain vacuum aluminium brazing furnaces 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. 0700390 is taken to have come into force on 14 September 2007.
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, establishes a framework for the regulation of customs duties and includes provisions for Tariff Concession Orders (TCOs) as detailed in Part XVA. These TCOs are intended to provide tariff concessions on certain goods that are not produced in Australia or are substitutable by locally produced goods. The purpose of these concessions is to encourage trade and economic efficiency by lowering customs duties for specific goods, thereby benefiting importers and potentially stimulating demand for these goods in the domestic market. Instrument No. 0700390, which was introduced to provide a tariff concession on certain vacuum aluminium brazing furnaces, exemplifies this legislative intent by offering a duty-free rate for these specific goods, as no substitutable goods were produced in Australia at the time of application. This measure aligns with the overarching policy objective of facilitating trade and reducing the cost burden on importers.
Scope and Application
The Tariff Concession Instrument No. 0700390 pertains to the Customs Act 1901, specifically under Part XVA which governs Tariff Concession Orders (TCOs). This legislation applies to goods that are the subject of a TCO, where a lower rate of customs duty is applicable. The Act allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods do not fall under the categories specified in section 269SJ of the Act. The primary criteria for approval of a TCO, as per section 269C, include the absence of substitutable goods produced in Australia in the ordinary course of business. The scope of the Act encompasses industries and entities that import goods eligible for tariff concessions, impacting their customs duty obligations. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia. The Act does not specify any exclusions or exemptions, and its application is not restricted by thresholds in this particular instance. Subordinate instruments may extend or restrict the application of the Act, but the specifics of such extensions or restrictions are not outlined in this particular TCO. The TCO No. 0700390, which came into force on 14 September 2007, specifically addresses certain vacuum aluminium brazing furnaces, reducing their duty from 5% to free.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0700390, which was made under section 269F of the Customs Act 1901, provide that a Tariff Concession Order (TCO) can be issued to lower the customs duty on certain vacuum aluminium brazing furnaces. This TCO (section 269P(3)) was made when the Chief Executive Officer (CEO) of Customs determined that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Consequently, these furnaces are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free rather than the general rate of 5% (section 269P(3)). The TCO was published in the Gazette with an invitation for submissions, although none were received (subsection 269K(1)).
The Customs Act 1901 imposes several obligations and requirements on the parties involved. The CEO must ensure that the TCO application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia on the application date (section 269C). The CEO is also required to publish a notice in the Gazette once an application is accepted as valid, inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the CEO proceeds to issue the TCO. Importers of the goods subject to the TCO are entitled to apply for a refund of duty paid on imports from the date the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
In the event of a breach of the provisions of the Customs Act 1901 or the related regulations, several civil and criminal consequences may arise. Although the explanatory statement does not specify the exact offences or penalties, under the Customs Act 1901, breaches can result in penalties such as fines or imprisonment, depending on the severity of the offence. The maximum penalties for certain offences are detailed in the Act and related regulations. It is important to note that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken prior to the registration date (subsection 269S(1)).