EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715533
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 thermal oil heater system on 18 September 2007.
Instrument
TCO No 0715533 was made on 23 November 2007. It declares that those certain thermal oil heater systems 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. 0715533 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs duties and the regulation of goods entering and leaving Australia. The Act includes provisions for the making of Tariff Concession Orders (TCOs) under Part XVA, which are intended to lower the rate of customs duty on certain goods. The introduction of this scheme was designed to address the gap in facilitating the import of specific goods that are not produced domestically, thereby supporting industries that rely on importing materials and components for their operations. The instrument F2007L04498, known as Tariff Concession Instrument No. 0715533, was enacted to provide a tariff concession for certain thermal oil heater systems, as requested by Laminex Pty Ltd. The instrument was made following an application process that met the core criteria under the Act, leading to a concession that sets the duty on these goods at free, down from the general rate of 5%. The policy objective behind this concession is to assist in making these goods more affordable, thus supporting the operations and competitiveness of businesses such as Laminex Pty Ltd.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing reduced customs duty rates for certain goods. This Act applies to any individual or entity seeking to import goods that may benefit from a TCO, provided the goods in question are not specifically excluded under section 269SJ, which lists items ineligible for tariff concessions. The scope of the Act extends nationally, given its Commonwealth nature, and its application is further detailed and possibly extended through subordinate instruments like the Customs Tariff Act 1995. The Act's geographic reach is thus nationwide, affecting importers and customs processes across Australia. Exemptions from the application of TCOs are explicitly stated, ensuring that the rights and liabilities of individuals or entities are not adversely affected by the concessions, particularly regarding transactions prior to the issuance of a TCO. The Explanatory Statement details how the application of the Tariff Concession Instrument No. 0715533, made on 23 November 2007, came into effect on 18 September 2007, offering a tariff concession for certain thermal oil heater systems, thus reducing the duty from the general rate of 5% to free, and allowing for duty refunds under specific regulations for importers.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria outlined in sections 269C and 269B. If satisfied, the CEO must make a written order (a TCO) specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO, as stated in subsection 269P(3), will apply from the date the application was lodged, as per subsection 269S(1).
The Customs Act 1901 imposes certain obligations on both the applicant and the CEO. For the applicant, it is necessary to ensure that the goods they are applying for a TCO on are not listed in section 269SJ and that they meet the core criteria. This includes demonstrating that no substitutable goods were produced in Australia at the time of the application. For the CEO, the obligations include accepting the application if it is valid, publishing a notice in the Gazette inviting submissions from any person who may object to the TCO, and making a written order if the application meets the core criteria. The CEO must also ensure that the TCO does not disadvantage any person (other than the Commonwealth) and does not impose liabilities in respect of actions taken before the TCO came into force.
In terms of consequences for breaches, the Customs Act 1901 does not explicitly state offences or penalties for failing to comply with the provisions regarding TCOs. However, failure to comply with the conditions set out in the Act could potentially lead to civil or criminal consequences under other sections of the Customs Act 1901, which include fines and imprisonment. The specifics of these penalties would depend on the nature and severity of the breach. The Act ensures that the rights of importers are beneficially affected and that they can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.