EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927021
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.
Dometic Pty Ltd applied for a TCO in respect of certain lpg fuelled air heaters on 27 July 2009.
Instrument
TCO No 0927021 was made on 09 October 2009. It declares that those certain lpg fuelled air 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. 0927021 is taken to have come into force on 27 July 2009.
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 enacted to provide a comprehensive framework for the administration of customs duties and related regulations in Australia. One of the key mechanisms within this framework is the Tariff Concession Order (TCO) process, which allows for the application of lower rates of customs duty on certain goods. This was introduced to address the need for flexibility in tariff application, particularly in cases where no substitutable goods are produced in Australia. The Parliament of Australia established this process under Part XVA of the Customs Act 1901, allowing the Chief Executive Officer of Customs to make decisions on tariff concessions based on specific criteria. The policy objective is to ensure that imports are managed in a way that supports economic efficiency and fairness, particularly for businesses that import goods which do not have local alternatives.
Scope and Application
The Customs Act 1901, as amended, applies to the application and administration of Tariff Concession Orders (TCOs) which are instrumental in determining the rate of customs duty on certain goods entering Australia. This Act specifically pertains to the application and assessment process for TCOs, which are issued by the Chief Executive Officer of Customs upon meeting core criteria. The application process is open to any person who can demonstrate that the goods in question are not produced in Australia and do not have substitutable goods domestically. This concession aims to facilitate the importation of goods that are not domestically manufactured, thus potentially benefiting importers by reducing the duty payable on specified goods. The TCO process ensures that the rights of any individual or entity, apart from the Commonwealth, are not adversely affected by the issuance of such orders. The geographic reach of this legislation is national, as it applies across Australia and is managed by the Commonwealth. The Act's provisions extend through subordinate instruments, which detail the specific criteria and conditions under which TCOs are granted, ensuring a streamlined and consistent application process.
Key Provisions
The main operative sections of this Tariff Concession Instrument (TCO) are contained within the Customs Act 1901 (the Act). Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be met for the application to be considered. This includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged (section 269D). If the CEO is satisfied that the application meets these criteria, they are required to make a written order under section 269P(3), declaring that the goods in question are subject to the specified tariff concession.
The Act imposes certain obligations on both the applicant and the CEO. For the applicant, the primary obligation is to ensure that their application for a TCO is made in accordance with the requirements of the Act, particularly by demonstrating that no substitutable goods are being produced in Australia. The CEO, on the other hand, must review the application to determine if it meets the core criteria and, if satisfied, make a written order as specified. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their views.
Should there be a breach of the provisions under this Act, there are specific civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties within the context of this TCO, breaches of the Customs Act 1901 can generally result in significant penalties. For instance, knowingly making a false statement or representation in an application can result in fines or imprisonment, as outlined in other sections of the Act. The maximum penalties can vary depending on the nature and severity of the offence but often include substantial fines and potential imprisonment terms.
Overall, the TCO aims to facilitate the importation of certain LPG fuelled air heaters by reducing the duty rate from the general rate of 5% to free, provided the core criteria are met. This relief is effective from the date the application was lodged, 27 July 2009, and does not impose any liabilities on any person, ensuring that the rights of importers are positively affected.