EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715801
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 air preheater on 20 September 2007.
Instrument
TCO No 0715801 was made on 30 November 2007. It declares that those certain thermal air preheaters 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. 0715801 is taken to have come into force on 20 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, established a framework under which the Chief Executive Officer of Customs could issue Tariff Concession Orders (TCOs) to apply lower rates of customs duty on certain goods. This legislative provision was introduced to address the need for more flexible tariff arrangements that could support industries and economic growth by reducing costs associated with importing specific goods. F2007L04589, the Tariff Concession Instrument No. 0715801, exemplifies this process by granting a tariff concession to Laminex Pty Ltd for certain thermal air preheaters, reducing their duty from 5% to free. The policy objective here is to support Australian industries by making imported goods more competitively priced without imposing any liabilities on individuals or entities for actions taken before the concession was registered. This approach ensures that the rights of importers are positively affected, allowing for duty refunds on eligible goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0715801 under the Customs Act 1901 applies specifically to certain thermal air preheaters, as identified by Laminex Pty Ltd in their application to the Chief Executive Officer of Customs (CEO). This instrument pertains to goods that are eligible for tariff concessions, which is a benefit granted when no substitutable goods are produced in Australia in the ordinary course of business, as stipulated by sections 269C and 269D of the Act. The application of this Instrument is Commonwealth-wide, as it is an instrument under the Customs Act 1901, which operates across Australia. The Instrument does not apply to goods specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The CEO must ensure the application meets the core criteria before making a decision, and once the Instrument is registered, it comes into force on the date the application was lodged, which in this case is 20 September 2007. Importantly, the Instrument does not affect the rights of any person except to the benefit of importers, who may apply for a refund of duty on goods imported since the date the Instrument came into effect.
Key Provisions
The Customs Act 1901, specifically Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be submitted by a person to the CEO if the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria, they must issue a TCO that applies a lower rate of customs duty to the specified goods. The core criteria for a TCO, as per section 269C, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO finds that these criteria are met, they must issue a written TCO order (s 269P(3)).
Entities and individuals must adhere to the conditions outlined in the Act for applying for and receiving a TCO. This includes ensuring that the goods for which the TCO is sought are not listed in section 269SJ and that the core criteria are met. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (s 269K(1)). This is to ensure transparency and allow for any objections to be considered. If the CEO does not receive any submissions, the TCO can proceed as per the application.
Failure to comply with the requirements of the Customs Act 1901, particularly those relating to TCOs, can result in penalties. Although specific penalties are not detailed in the provided explanatory statement, it is implied that non-compliance could lead to legal repercussions. The Act may also provide for civil or criminal consequences for any breaches, though the exact nature of these consequences would depend on the specific provisions of the Customs Act and any related legislation. The general principle is that any person who fails to adhere to the requirements of the Act or the conditions of a TCO may face legal action, including fines or other penalties as stipulated by law.
The Tariff Concession Order No. 0715801, issued on 30 November 2007, declared that certain thermal air preheaters are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods. This order came into force on the date the application was lodged, 20 September 2007, and does not affect any rights or impose liabilities on persons other than the Commonwealth in relation to actions taken before the registration date. Importers of these goods can apply for a refund of duty under the regulations, highlighting the beneficial impact on importers.