EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715511
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.
Laminex Pty Ltd applied for a TCO in respect of certain flue gas cleaning system on 18 September 2007.
Instrument
TCO No 0715511 was made on 23 November 2007. It declares that those certain flue gas cleaning system 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. 0715511 is taken to have come into force on 18 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 Tariff Concession Instrument No. 0715511, enacted in 2007 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods that were not produced in Australia and for which no substitutable goods were available domestically. This instrument was enacted by the Australian Parliament and is designed to facilitate trade by reducing customs duty on particular imported goods, thereby encouraging their importation and use within the country. The primary policy objective behind this legislation is to ensure that Australian businesses and consumers have access to competitively priced goods that are not manufactured locally, thus promoting economic efficiency and consumer welfare.
This instrument specifically addresses the application made by Laminex Pty Ltd for a tariff concession on certain flue gas cleaning systems. Following the application, the Chief Executive Officer of Customs determined that the systems in question were not produced in Australia and that there were no substitutable goods available domestically. Consequently, a Tariff Concession Order was issued, effective from the date of the application, 18 September 2007. This order resulted in the elimination of the general customs duty rate of 5% for these specific flue gas cleaning systems, thereby providing economic relief to importers and potentially lowering the cost of these systems for end-users.
Scope and Application
The Tariff Concession Instrument No. 0715511 under the Customs Act 1901 applies to Laminex Pty Ltd, specifically to certain flue gas cleaning systems. The instrument allows for a concession on customs duty for these systems, which are not produced in Australia and have no substitutable goods available locally. The instrument is issued by the Chief Executive Officer of Customs, who must determine that the application for the concession meets the core criteria specified in the Act, primarily that no substitutable goods are produced in Australia. The concession applies from the date the application was lodged, 18 September 2007, and provides a zero rate of duty on these goods, down from the general rate of 5%. The instrument does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, including the right for importers to apply for a refund of duty on goods imported since the concession came into effect.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer (CEO) of Customs. These orders apply a reduced rate of customs duty to specified goods, as outlined in section 269F. To initiate this process, an individual or entity must submit an application to the CEO for a TCO, ensuring that the goods in question are not those listed in section 269SJ, which are ineligible for such concessions. The CEO's decision to grant a TCO is contingent on satisfying the core criteria stipulated in section 269C, namely, the absence of substitutable goods produced in Australia at the time the application was lodged. This determination hinges on the definitions provided in sections 269D, 269E, and 269F, which detail what constitutes 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', respectively. Once these criteria are met, the CEO is obligated to issue a written TCO as per section 269P(3), specifying the applicable item in Schedule 4 of the Customs Tariff Act 1995.
Entities subject to the Act, particularly those applying for a TCO, must adhere to several obligations. They must ensure that their application is made in good faith and that the goods in question are not prohibited from receiving tariff concessions. They must also be aware of the public consultation process, as mandated by section 269K(1), which requires the CEO to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. Additionally, applicants must be prepared to substantiate their claims that no substitutable goods were produced in Australia at the time of application. Failure to meet these obligations could result in the CEO's refusal to issue a TCO.
The Act does not explicitly outline criminal or civil penalties for breaches related to the TCO process itself. However, it is worth noting that the Customs Act 1901, in general, contains provisions that could lead to penalties for fraudulent claims or misrepresentations. Such offences could potentially attract fines or imprisonment, depending on the severity of the breach. For instance, under section 238 of the Customs Act, individuals or entities found guilty of fraud or knowingly making false statements could face substantial penalties. Although specific penalties for TCO-related breaches are not detailed in the Act, it is prudent for applicants to ensure their applications are truthful and accurate to avoid any potential legal repercussions.