EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839785
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.
Gaf Control (Sales) Pty Ltd applied for a TCO in respect of certain ceiling exhaust fan 35w on 13 November 2008.
Instrument
TCO No 0839785 was made on 06 February 2009. It declares that those certain ceiling exhaust fans 35w 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. 0839785 is taken to have come into force on 13 November 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 Parliament of Australia, includes provisions for the application of Tariff Concession Orders (TCOs) through which a lower rate of customs duty can be applied to specified goods. The Act enables the Chief Executive Officer of Customs to assess and approve TCO applications if certain criteria are met, including that no substitutable goods are produced in Australia. This scheme aims to provide relief to importers by reducing the customs duty on particular goods, thereby enhancing competitive advantage and potentially lowering costs for businesses and consumers. Tariff Concession Instrument No. 0839785, introduced in 2009, specifically addresses the application of a zero rate of duty on certain ceiling exhaust fans 35w, effective from the date of the application, aligning with the policy objective of facilitating trade by reducing the financial burden on importers of these specific goods.
Scope and Application
The Tariff Concession Instrument No. 0839785 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO), which in this case are certain ceiling exhaust fans 35w. This Act allows for the application of a lower rate of customs duty for these goods if certain criteria are met. The legislation is designed to benefit importers of these goods by potentially reducing their duty costs. The Act applies to the Commonwealth and operates on a national level, providing a streamlined process for the Chief Executive Officer of Customs to assess and approve applications for TCOs. The application process requires that the goods in question are not already produced in Australia and do not have substitutable goods domestically available. The TCO is effective from the date the application is lodged and does not retroactively affect any rights or impose any liabilities prior to its commencement.
The scope of this Act is specifically tailored to the importation of goods and the application of customs duties, with exclusions for goods already produced in Australia or those for which substitutable goods exist domestically. The Act does not impose any liabilities on individuals or entities other than the Commonwealth and does not disadvantage existing rights as of the registration date. Subordinate instruments may further define the criteria for determining substitutable goods and the process for applying for a TCO, but these are not elaborated upon in the provided explanatory statement.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) are found in sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided that the goods do not fall under the prohibited list in section 269SJ. If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C), a TCO is made under section 269P. This order declares that the goods in question are subject to a lower rate of customs duty as specified in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on the parties involved primarily revolve around the application process and the CEO’s decision-making authority. The CEO must ensure that the application for a TCO is assessed against the core criteria and that no substitutable goods are produced in Australia. Additionally, under section 269K, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. This step ensures transparency and provides a safeguard against unwarranted concessions. For applicants, the obligation is to provide accurate and complete information to substantiate their claim for tariff concessions.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. If a person knowingly provides false or misleading information in their TCO application, they may face criminal penalties. Under section 276 of the Act, this can include fines of up to $22,200 for individuals and up to $111,000 for corporations. Additionally, section 278 imposes civil penalties on persons who contravene the Act, with penalties including fines up to $1,110 for individuals and $5,550 for corporations. These penalties underscore the importance of accuracy and integrity in the application process.
In summary, the Customs Act 1901 provides a framework for tariff concessions that aims to balance economic incentives with regulatory oversight. The core criteria ensure that concessions are granted judiciously, and the obligations on the CEO and applicants ensure a fair and transparent process. The potential penalties for non-compliance serve as a deterrent against fraudulent applications, maintaining the integrity of the scheme.