EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804545
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.
Saacke Australia Pty Ltd applied for a TCO in respect of certain gas burners parts on 25 March 2008.
Instrument
TCO No 0804545 was made on 13 June 2008. It declares that those certain gas burners parts 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. 0804545 is taken to have come into force on 25 March 2008.
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 administering customs and excise duties, including provisions for Tariff Concession Orders (TCOs). The Act was introduced to facilitate the reduction of customs duties on specific goods under certain conditions, thus promoting trade and economic efficiency. TCO No. 0804545, made on 13 June 2008, provides a tariff concession for certain gas burner parts, lowering the duty rate from 5% to free, reflecting the policy objective to support industries by reducing the cost of imported components. The instrument was created following an application by Saacke Australia Pty Ltd, and the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria under section 269C of the Act. The TCO came into effect on 25 March 2008, and no submissions opposing the concession were received.
Scope and Application
The Tariff Concession Instrument No. 0804545 under the Customs Act 1901 applies to any person or entity seeking tariff concessions for certain gas burner parts imported into Australia. This legislation is applicable at the Commonwealth level, and its geographic reach encompasses all of Australia. The Act permits the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods, provided the application meets the core criteria outlined in section 269C of the Act. The TCO in question was made on 13 June 2008, following an application by Saacke Australia Pty Ltd on 25 March 2008. The instrument was effective from the date of the application, and it declares that the gas burner parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%. The Act ensures that the TCO does not affect the rights of any person other than the Commonwealth or impose liabilities on any person regarding actions taken before the date of registration. Importers of the affected goods are entitled to apply for a refund of duty paid since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of Tariff Concession Orders (TCOs) by any person seeking to have a lower rate of customs duty applied to specific goods. The application process begins when an individual or entity submits a request to the Chief Executive Officer of Customs (CEO) for a TCO in respect of particular goods (section 269F). The CEO must then determine whether the application is valid and if it meets the core criteria specified in section 269C. Notably, the goods must not be listed in section 269SJ, which details those goods that cannot be subject to a TCO. The core criteria (section 269C) are satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ are provided in sections 269D, 269E, and 269F respectively.
The obligations placed on the CEO under this Act are significant. Once an application is deemed valid and meets the core criteria, the CEO must issue a written TCO (section 269P(3)). This order specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced duty rate. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit objections or reasons why the TCO should not be granted. The CEO must consider any submissions received before making a final decision.
Failure to comply with the provisions of the Customs Act 1901 and the related TCOs can result in various consequences. While the explanatory statement does not specify exact offences or penalties, breaches of customs regulations generally attract both civil and criminal penalties under Australian law. Civil penalties can include financial penalties and the seizure of goods, while criminal penalties can result in fines and imprisonment, depending on the severity of the breach. The specific maximum penalties for breaches would be determined by the relevant provisions of the Customs Act 1901 and other associated legislation.