EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811403
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.
Transpacific Industries Group Ltd applied for a TCO in respect of certain heat exchanger tube bundle extractors on 04 June 2008.
Instrument
TCO No 0811403 was made on 15 August 2008. It declares that those certain heat exchanger tube bundle extractors 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. 0811403 is taken to have come into force on 04 June 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 was amended to include the Tariff Concession Instrument No. 0811403, enacted in 2008, which aims to address the issue of facilitating access to specific goods by reducing their customs duty rates. The instrument was introduced to provide tariff concessions on certain goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) when specific criteria are met. The key objective of this instrument is to ensure that no substitutable goods are produced in Australia at the time of the application, thereby justifying a reduction in customs duty rates for the specified goods. The instrument was created by the CEO of Customs, who is mandated under the Act to consider applications for tariff concessions and determine whether they meet the outlined criteria. This legislative measure aims to support importers by potentially lowering the cost of importing certain goods, thus fostering economic benefits within the relevant industries.
Scope and Application
The Tariff Concession Instrument No. 0811403 under the Customs Act 1901 applies to the concession of customs duty for certain heat exchanger tube bundle extractors. The instrument is specifically directed at Transpacific Industries Group Ltd, which applied for this concession on 4 June 2008. The application was accepted by the Chief Executive Officer of Customs (CEO) and a Tariff Concession Order (TCO) was subsequently made on 15 August 2008. The TCO stipulates that the specified goods are to be subject to a zero rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, which contrasts with the general duty rate of 5% for such goods. This concession is effective from the date the application was lodged, thereby protecting the rights of importers who can now apply for a refund of duty for goods imported since that date. The instrument does not impose any new liabilities on any person and does not adversely affect the rights of any person as at the date of registration.
The scope of the Act extends to the national level, as it falls under the purview of the Commonwealth. The Act allows for the application of lower rates of customs duty through the issuance of TCOs, subject to certain criteria being met. The process includes an invitation for public submissions, although in this instance, none were received. The CEO’s decision to grant the concession was based on the absence of substitutable goods being produced in Australia. This decision is part of a broader scheme under Part XVA of the Customs Act 1901, which governs the making of TCOs by the CEO.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0811403 under the Customs Act 1901 (section 269F) allow the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) in respect of goods, provided the application meets the core criteria outlined in section 269C. Specifically, section 269C requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a lower rate of customs duty as specified in the order (section 269P(3)). For the TCO No. 0811403, this lower rate of duty is free, whereas the general rate of duty on these goods is 5%.
The obligations imposed by the Act on parties include the requirement for the CEO to assess whether the application for a TCO meets the core criteria. If the application is deemed valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the making of the TCO (section 269K(1)). The CEO did not receive any submissions in response to the notice for TCO No. 0811403. Additionally, the Act requires that a TCO is deemed to come into force on the day the application is lodged (section 269S(1)). Consequently, TCO No. 0811403 is considered effective from 4 June 2008.
Furthermore, the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, to their disadvantage or impose any liabilities on them in respect of actions taken before the date of registration (section 269S(1)). Importers of the goods subject to this TCO will be able to apply for a refund of duty paid on these goods since the effective date of the TCO (Regulations, paragraph 126(1)(r)).
Breaching the requirements of the Customs Act 1901 can result in significant consequences. While the specific offences, penalties, and consequences for breach are not detailed in the explanatory statement, the Act generally provides for both civil and criminal penalties. These can include fines and imprisonment for those found guilty of contravening the Act's provisions. The exact penalties depend on the nature and severity of the offence, as outlined in the Act and related legislation. The Act's provisions ensure that the TCO process is transparent and fair, while also protecting the rights of all parties involved.