EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0819440
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.
Caltes Refineries Pty Ltd applied for a TCO in respect of certain welded plate heat exchangers on 16 July 2008.
Instrument
TCO No 0819440 was made on 10 October 2008. It declares that those certain welded plate heat exchangers 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. 0819440 is taken to have come into force on 16 July 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. 0819440 was enacted in 2008 as a part of the Customs Act 1901. This legislation was introduced to address the need for tariff concessions on specific goods, allowing for reduced customs duty rates on items that meet certain criteria. The instrument was established to streamline the process of applying for and granting tariff concessions, ensuring that businesses can benefit from lower customs duties on goods that are not readily produced in Australia. The instrument was enacted by the Chief Executive Officer of Customs, under the authority granted by the Customs Act 1901. The policy objective of this instrument is to facilitate trade by reducing the financial burden on businesses importing goods that are not produced domestically, thereby promoting economic efficiency and competitiveness.
The instrument was introduced following an application by Caltex Refineries Pty Ltd for a tariff concession on certain welded plate heat exchangers. After evaluating the application and determining that no substitutable goods were produced in Australia, the Chief Executive Officer of Customs granted the tariff concession, making the application effective from the date it was lodged. This decision was made without any objections from the public, as no submissions were received in response to the published notice in the Gazette. The tariff concession allows for these specific heat exchangers to be subject to a zero rate of customs duty, down from the general rate of 5%, thereby directly benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Tariff Concession Instrument No. 0819440 applies to the importation of certain welded plate heat exchangers, as designated by the Customs Act 1901. This legislation specifically targets the tariff concessions available to these goods, with the instrument declaring that the goods are subject to a free rate of duty under the Customs Tariff Act 1995, as opposed to the general rate of 5%. The Act applies to any person or entity seeking to import these specific goods into Australia, provided they meet the criteria outlined under the Customs Act. The instrument ensures that the geographic scope of this concession is nationwide, applying across all states and territories of Australia. The application of the Tariff Concession Order does not extend to any goods specified in section 269SJ of the Customs Act, which lists goods that are ineligible for tariff concessions. The Act allows for the creation of subordinate instruments to further detail the application of the tariff concessions, providing flexibility in how these concessions are administered and updated.
Key Provisions
The Customs Act 1901 establishes a framework for the application of Tariff Concession Orders (TCOs) through Part XVA, specifically sections 269C, 269F, 269S, and 269P (subsection 3). These sections allow the Chief Executive Officer (CEO) of Customs to make TCOs for goods that do not have Australian-produced substitutes, thereby reducing the customs duty on those goods. When an application for a TCO is lodged, the CEO assesses whether it meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was made (section 269C). If the criteria are satisfied, the CEO is required to make a written TCO (section 269P(3)). This process was followed for TCO No. 0819440, which applied to certain welded plate heat exchangers, resulting in a concession that lowered the duty on these goods from 5% to free.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure their application is made in accordance with the statutory requirements and provide sufficient information to allow the CEO to assess whether the core criteria are met. The CEO is obliged to consider the application and decide whether to make a TCO based on the information provided. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the making of a TCO. In this case, no submissions were received, and the CEO proceeded to make TCO No. 0819440. The Act also requires that TCOs not affect the rights of any person as at the date of registration, meaning that TCOs do not retroactively impose liabilities or disadvantage any party.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for non-compliance with the TCO provisions. However, non-compliance with customs regulations generally can result in penalties under other sections of the Customs Act, including fines and imprisonment. For example, section 203 of the Act provides that knowingly making a false or misleading statement in connection with a customs matter can result in fines of up to $11,000 and/or imprisonment for up to two years. Furthermore, section 249 imposes penalties for making false statements or providing false information to the CEO in the context of customs duties and taxes, which can result in fines and imprisonment. It is essential for applicants and the CEO to adhere to the statutory requirements to avoid potential legal repercussions.