EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1027699
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.
Everdure Australia Pty Ltd applied for a TCO in respect of certain radiant and or convection gas heater parts on 22 June 2010.
Instrument
TCO No 1027699 was made on 13 September 2010. It declares that those certain radiant and or convection gas heater parts 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. 1027699 is taken to have come into force on 22 June 2010.
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 Australian Parliament, establishes a framework for the administration of customs and excise duties and sets out the process for making Tariff Concession Orders (TCOs) to provide relief from customs duty. The Act was amended to introduce the mechanism for TCOs under Part XVA, aiming to address the issue of applying lower customs duty rates to certain imported goods under specific conditions. TCO No. 1027699, issued on 13 September 2010, is one such order that was made in response to an application by Everdure Australia Pty Ltd for tariff concessions on certain radiant and convection gas heater parts. The instrument was enacted to provide a tariff concession on these goods, with the general duty rate reduced to free, effective from the date of the application, 22 June 2010. The policy objective behind this concession is to ensure that no substitutable goods were produced in Australia on the date of the application, thereby facilitating the import of these goods at a lower duty rate.
Scope and Application
The Tariff Concession Instrument No. 1027699 pertains to the Customs Act 1901, specifically addressing the application and processing of Tariff Concession Orders (TCOs) for particular goods. This legislative instrument applies to individuals or entities, such as Everdure Australia Pty Ltd, that seek to have the tariff on specific imported goods reduced or eliminated through the application process outlined in the Act. The instrument extends to goods specified in the application, in this case, certain radiant and convection gas heater parts, and is effective in providing a concession from the general rate of duty of 5% to a rate of duty that is free. The TCO's jurisdiction is under the Commonwealth and applies nationally, influencing the importation of the specified goods across Australia. There are exclusions under section 269SJ of the Act, which details goods that are ineligible for TCOs, ensuring that the concessions do not apply to items that could be detrimental to domestic production or otherwise inappropriate for tariff reductions. The Act allows for the scope of application to be further defined or restricted through subordinate instruments, thereby enabling the regulation to be adapted to changing economic conditions or policy objectives.
Key Provisions
The primary sections of the Customs Act 1901, specifically under Part XVA, establish a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). These sections allow for the application of a lower rate of customs duty on goods that are subject to a TCO (s 269C, s 269B). For an application to be considered, it must not be in relation to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application does not pertain to these restricted goods, the CEO must assess whether it meets the core criteria, which require that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). If the CEO determines that the application meets the core criteria, they must issue a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby exempting them from the general duty rate (s 269P(3)).
The obligations imposed by the Act on the parties involved are multifaceted. Firstly, applicants must ensure their applications comply with the core criteria, meaning they must demonstrate that no substitutable goods were produced in Australia on the date the application was lodged (s 269C). The CEO, on receiving a valid application, is obligated to publish a notice in the Gazette inviting any objections to the TCO (s 269K(1)). The CEO must then consider any submissions received and decide whether to issue a TCO based on the criteria outlined in the Act. Additionally, the CEO must ensure that the TCO does not disadvantage any person's rights as they stood at the time of registration or impose liabilities for actions taken before the TCO came into effect (s 269S(1)).
In terms of breaches and penalties, the Act does not explicitly state penalties for non-compliance with TCO regulations. However, it is implied that failure to comply with the requirements set out in the Act could potentially lead to legal consequences. For instance, if an entity misrepresents information in an application for a TCO, this could be viewed as a breach of the Act, potentially leading to civil or criminal penalties under other sections of the Customs Act or related legislation. The exact nature and severity of penalties would depend on the specific circumstances and the applicable laws at the time of the alleged breach.