EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701745
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.
Kingston Bridge Engineering Pty Ltd applied for a TCO in respect of certain cooling spray tanks on 02 February 2007.
Instrument
TCO No 0701745 was made on 30 April 2007. It declares that those certain cooling spray tanks 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. 0701745 is taken to have come into force on 02 February 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, established the framework for the Customs Tariff and provides for Tariff Concession Orders (TCO) through Part XVA. This Act was introduced to address the need for a mechanism that allows for lower customs duty rates on certain imported goods, provided they meet specific criteria and do not have substitutable goods produced in Australia. The policy objective behind these concessions is to support industries by reducing the cost of imported goods that are essential for their operations, thereby enhancing their competitiveness without causing undue disadvantage to Australian producers. In the context of Tariff Concession Instrument No. 0701745, the Chief Executive Officer of Customs granted a concession for certain cooling spray tanks, resulting in a reduction of the duty rate from 5% to free, effective from the date the application was lodged. This concession was made after no objections were received following a published invitation for submissions.
Scope and Application
The Tariff Concession Instrument No. 0701745 under the Customs Act 1901 applies to the specific category of goods known as cooling spray tanks, which are the subject of the application made by Kingston Bridge Engineering Pty Ltd. This instrument facilitates the concession of tariff rates for these goods, allowing for a reduced rate of customs duty from the general rate of 5% to a free rate, provided the goods meet the criteria outlined in the Act. The application of this instrument is governed by the core criteria stipulated in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The geographic and jurisdictional reach of this legislation is national, applying across Australia under the Commonwealth's authority. The exclusions are narrowly defined, as specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The instrument extends the application of the Customs Act by specifically addressing the tariff rates for the designated goods, and it does not impose any new liabilities or affect existing rights of any party other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower the customs duty on certain goods. Section 269F outlines the process for applying for a TCO, and if the CEO determines that the application meets the core criteria, they must issue a written order (section 269P(3)). The core criteria are defined in section 269C, which stipulates that the application must concern goods for which no substitutable goods are produced in Australia in the ordinary course of business. The terms "substitutable goods," "goods produced in Australia," and "ordinary course of business" are further defined in sections 269D, 269E, and 269F respectively.
The obligations imposed by the Act require applicants to ensure that the goods in question do not have substitutable goods produced in Australia. The CEO, upon receiving an application, must decide whether the application meets the core criteria and, if satisfied, must issue a TCO. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the proposed TCO. In the case of TCO No. 0701745, no submissions were received, and the TCO was issued on 30 April 2007, effective from 02 February 2007.
The legislation further specifies that the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, thereby preventing any adverse impact on non-Commonwealth entities regarding actions taken prior to the TCO's registration. Importers, however, are beneficially affected as they can apply for a refund of duty on goods imported since the TCO came into force, pursuant to paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person.
In terms of penalties and consequences, the Act does not specify any offences directly related to the application or issuance of a TCO. However, any misuse of the TCO or fraudulent claims for duty refunds may lead to criminal or civil penalties under other relevant sections of the Customs Act 1901 or other applicable laws. The maximum penalties for such offences can vary widely depending on the nature and severity of the offence, but they can include fines and imprisonment.