EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939751
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.
Tytronics Development Australia Pty Ltd applied for a TCO in respect of certain ducted heater controllers on 22 October 2009.
Instrument
TCO No 0939751 was made on 08 January 2010. It declares that those certain ducted heater controllers 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. 0939751 is taken to have come into force on 22 October 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 Tariff Concession Instrument No. 0939751 was enacted in 2010 under the authority of the Customs Act 1901. This legislation was introduced to address the specific needs of businesses seeking relief from customs duties on certain imported goods, thereby promoting fair trade practices and supporting the competitive landscape of Australian industries. The instrument was made by the Chief Executive Officer of Customs, who, after receiving an application from Tytronics Development Australia Pty Ltd for tariff concessions on certain ducted heater controllers, determined that these goods qualified for a lower rate of customs duty. This decision was based on the absence of substitutable goods being produced in Australia at the time of the application. The instrument aims to provide relief to importers of these goods by setting the rate of duty at free, as opposed to the general rate of 5%.
The enacting body for this instrument was the Chief Executive Officer of Customs, who followed the legislative framework established by the Customs Act 1901. The policy objective behind this Tariff Concession Order was to ensure that Australian businesses and consumers could access certain goods at a reduced customs duty rate, thus facilitating competitive pricing and broader market access. The process involved publishing a notice in the Gazette to invite any objections to the application, although none were received. The concession order came into force on the date the application was lodged, ensuring that the rights of existing parties were not adversely affected, and providing a clear pathway for duty refunds to importers.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for a reduced rate of customs duty on specified goods. An entity or person may apply to the CEO for a TCO for goods that meet the core criteria, including that no substitutable goods are produced in Australia at the time the application is lodged. A TCO applies to the specific goods declared in the order, and its issuance is contingent on the absence of substitutable Australian-made goods that could serve the same purpose as the imported goods. The TCO scheme aims to benefit importers by potentially reducing the duty rate on certain goods, as seen in the case of Tytronics Development Australia Pty Ltd, where a TCO was issued for ducted heater controllers, reducing the duty from 5% to free. The geographic reach of the Act is national, as it is a Commonwealth Act. The Act does not specify exclusions beyond those goods listed in section 269SJ, which are ineligible for TCOs, and does not detail any thresholds for applications. The application process includes a mandatory public notification to allow for submissions, though in this instance, no objections were received. The TCO comes into effect on the date the application is lodged, with no retrospective application or imposition of liabilities.
Key Provisions
The Tariff Concession Order (TCO) No. 0939751 under the Customs Act 1901 specifies that certain ducted heater controllers are eligible for a tariff concession, effectively granting them a zero duty rate (sections 269C, 269P). This concession applies from the date of the application, 22 October 2009, as per subsection 269S(1). The order was made following a successful application by Tytronics Development Australia Pty Ltd, which was assessed against the core criteria outlined in section 269C of the Act. This involved confirming that no substitutable goods were being produced in Australia at the time the application was lodged, as per section 269D and 269E.
The obligations imposed by the Act on the Chief Executive Officer of Customs (CEO) include the requirement to consider applications for TCOs and to ensure that they meet the core criteria set out in section 269C. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be granted, as stipulated in subsection 269K(1). This transparency step ensures that all relevant stakeholders have an opportunity to voice their opinions. In this case, no submissions were received in response to the notice.
In terms of consequences for non-compliance or breach of the Act, it is important to note that the Act itself does not specify explicit criminal or civil penalties for failing to adhere to the TCO provisions. However, any misuse or fraudulent claims related to the tariff concession could potentially lead to penalties under other sections of the Customs Act 1901, which include fines and imprisonment for serious breaches. For instance, under section 221 of the Act, individuals or entities found guilty of fraudulent activities related to customs duties may face penalties of up to 10 years imprisonment or substantial fines. The Act also includes provisions for the recovery of duties and penalties, ensuring that the government can reclaim any duties that were unlawfully avoided.