EXPLANATORY STATEMENT
Tariff Concession Instrument No.0412278
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.
Energy Conservation Systems applied for a TCO in respect of certain lithium chloride desiccant solution dry conditioners on 15 November 2004.
Instrument
TCO No 0412278 was made on 11 February 2005. It declares that those certain lithium chloride desiccant solution dry conditioners 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 3%.
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 No0412278 is taken to have come into force on 15 November 2004.
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 Tariff Concession Orders (TCOs) to provide relief on certain goods through reduced customs duty. These concessions are intended to support industries that lack domestic production capacity, ensuring they are not at a competitive disadvantage in the market. The Tariff Concession Instrument No.0412278, issued on 11 February 2005, is an example of such an order. In this instance, Energy Conservation Systems applied for a concession on lithium chloride desiccant solution dry conditioners, which were granted a reduced duty rate from 5% to 3%, effective from 15 November 2004. This reduction is intended to benefit importers by lowering the cost of these imported goods, thereby aiding the competitiveness of the Australian market while aligning with the policy objective of supporting industries without local production.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, applicable to certain goods that are not substitutable by Australian-produced items. The Act applies to individuals and entities that import goods eligible for tariff concessions, focusing on the specific use of the imported items and whether they have Australian counterparts. The geographic reach of this legislation is national, impacting all importers across Australia, as it pertains to the customs duty levied on imported goods. The Act excludes goods specified in section 269SJ, which cannot be subject to a TCO, and any application that does not meet the core criteria outlined in sections 269C, 269B, and 269D. The scope of the Act may be extended through subordinate instruments, which provide further definitions and operational details for implementing tariff concessions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0412278 under the Customs Act 1901 (section 269F) permit the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) in respect of certain goods, provided the application meets the core criteria set out in sections 269C, 269B, 269D, and 269E. Specifically, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B further defines terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Once the CEO is satisfied that the application meets these criteria, section 269P(3) mandates the CEO to issue a written TCO.
The Act imposes several obligations on the parties involved. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette once a TCO application is accepted as valid. This notice must include an invitation for any interested parties to lodge submissions if they believe the TCO should not be made. For instance, in the case of TCO No. 0412278, no submissions were received in response to the notice. Additionally, section 269S(1) specifies that a TCO is considered effective from the day the application was lodged, thereby ensuring that the rights of importers are protected from the outset.
In terms of consequences for non-compliance, the Act does not explicitly enumerate offences, penalties, or civil/criminal consequences for breaches related to TCO applications. However, the importance of adhering to the procedural requirements and the criteria set out in the Act is paramount. Any failure to meet the core criteria or to follow the prescribed procedures could potentially render the TCO invalid. The Act does provide for general compliance mechanisms under the broader Customs Act 1901, which could include fines or other penalties for non-compliance with customs regulations. Furthermore, while the Act specifies that a TCO does not affect the rights of a person as at the date of registration or impose liabilities for actions taken prior to registration, it remains crucial for parties to comply with the terms set out in the TCO to avoid any potential liabilities or disadvantages.