EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0805462
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 Group Pty Limited applied for a TCO in respect of certain thermal oil heaters on 28 April 2008.
Instrument
TCO No 0805462 was made on 18 July 2008. It declares that those certain thermal oil heaters 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. 0805462 is taken to have come into force on 28 April 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 Tariff Concession Instrument No. 0805462, enacted in 2008, is an amendment to the Customs Act 1901. This legislation was introduced to address the need for a streamlined process for the application and approval of tariff concessions on specific goods, ensuring that Australian businesses can benefit from reduced customs duties when no suitable domestic alternatives exist. The instrument provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions, thereby reducing the duty on particular imported goods under specific conditions. The policy objective, as set out in the Customs Act 1901, is to support Australian industry by ensuring that imported goods subject to tariff concessions are not substitutable by locally produced goods, thus protecting domestic production where appropriate. The instrument was created following an application by Laminex Group Pty Limited for tariff concessions on certain thermal oil heaters, reflecting the Act's intent to facilitate trade while safeguarding local industries.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0805462, applies to goods that are the subject of a Tariff Concession Order (TCO) and the entities that import these goods. The Act facilitates the application process for TCOs by allowing eligible applicants to seek lower customs duty rates on specified goods, provided these goods are not produced in Australia in the ordinary course of business and are not otherwise excluded under section 269SJ of the Act. The geographic reach of this legislation is national, as it applies across all states and territories of Australia, governed by the Commonwealth. The instrument is designed to benefit importers by reducing duty rates, which can be particularly advantageous for industries importing goods that are not domestically produced. Any exclusions are strictly defined within the Act, ensuring that only those goods meeting the specified criteria are eligible for tariff concessions.
The application process for a TCO, as outlined in the Customs Act 1901, involves the Chief Executive Officer of Customs assessing the applicant's request against the core criteria, which include the absence of substitutable goods produced in Australia. Once the application is deemed to meet these criteria, the CEO issues a TCO, which is effective from the date the application was lodged. The instrument does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of any person as at the date of registration. This legislative framework, supplemented by subordinate instruments, ensures a streamlined process for tariff concessions, benefiting importers and industries reliant on imported goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0805462, under the Customs Act 1901, include section 269C (which outlines the core criteria for a Tariff Concession Order (TCO) application), section 269D (defining goods produced in Australia), section 269E (defining ordinary course of business), and section 269P(3) (which mandates the making of a TCO if the core criteria are met). According to section 269C, a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If these criteria are satisfied, the Chief Executive Officer (CEO) of Customs must make a TCO, declaring that the goods in question are subject to a prescribed rate in the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by the Act on the parties involved primarily concern the application process and the criteria for granting a TCO. An applicant, such as Laminex Group Pty Limited in this case, must ensure that their application for a TCO meets the core criteria specified in section 269C. This involves demonstrating that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, must verify the application against these criteria, consult as necessary by inviting submissions from interested parties (section 269K(1)), and if satisfied, proceed to issue a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, providing an opportunity for submissions (section 269K(1)). In this instance, no submissions were received.
Regarding offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly state penalties for non-compliance with the TCO provisions in this explanatory statement. However, general provisions within the Act may impose penalties for breaches related to customs duties and other import/export regulations. The act of issuing a TCO that does not meet the statutory criteria could potentially lead to legal challenges or administrative penalties if it is found that the CEO did not adhere to the legislative requirements in making the order. Furthermore, any misuse of the TCO by importers or other parties could result in additional customs duty liabilities or other legal consequences as per the broader customs legislation.