EXPLANATORY STATEMENT
Tariff Concession Instrument No.0412279
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 thermal operation dry conditioners on 15 November 2004.
Instrument
TCO No 0412279 was made on 11 February 2005. It declares that those certain thermal operation 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 No0412279 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, establishes a framework for the imposition of customs duty on imported goods, which includes the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs). These orders provide for a lower rate of duty on specified goods under certain conditions. The instrument in question, Tariff Concession Instrument No. 0412279, was introduced to address the specific need of Energy Conservation Systems, which applied for a concession on certain thermal operation dry conditioners. The policy objective here is to support the importation of goods that are not domestically produced, thereby encouraging trade and providing benefits to importers through a reduced duty rate. The instrument was made on 11 February 2004, applying retroactively to the date of the application, 15 November 2004, without imposing any disadvantage or liabilities on parties other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This act applies to individuals or entities seeking tariff concessions for specific goods, provided that the goods are not listed in section 269SJ of the Act, which excludes certain goods from concession eligibility. The core criteria for approving a TCO application, as stipulated in section 269C, require that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The term "substitutable goods" is defined in section 269B, where it refers to goods produced in Australia that can be used in a manner similar to the goods in question. The TCO mechanism is designed to provide relief to importers of specific goods, enabling them to benefit from reduced customs duty rates. The scope of this legislation is national, operating under the Commonwealth jurisdiction. The application of the Act is not limited by geographic boundaries but is instead directed at the import of goods into Australia. Notably, the Act does not impose any retroactive liabilities or disadvantages to any person other than the Commonwealth. Any TCOs made under this act do not affect the rights of individuals or entities as they stood prior to the TCO’s registration. The commencement date of a TCO is the date on which the application for the TCO is lodged, as per subsection 269S(1) of the Act. The process also includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from interested parties; however, no submissions were received for TCO No 0412279. The TCO process allows for further regulation and specification through subordinate instruments, ensuring flexibility in its application.
Key Provisions
The Tariff Concession Instrument No. 0412279, made under the Customs Act 1901, is designed to facilitate tariff concessions for certain goods. The primary provision of this Instrument (section 269P(3)) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, they must issue a written order declaring that the goods in question are subject to a prescribed tariff item. In this specific case, the Instrument declares that certain thermal operation dry conditioners are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a reduced duty rate of 3% instead of the general rate of 5%.
The obligations imposed by the Customs Act 1901 on the parties involved, particularly the CEO, include ensuring that the TCO application meets the core criteria specified in section 269C. The CEO must verify that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269D and section 269E, and that the goods in question are not those listed in section 269SJ, which are ineligible for a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1).
Breaches of the provisions of the Customs Act 1901 can lead to various legal consequences. Although the specific penalties for non-compliance with the Act are not detailed in the Explanatory Statement, generally, violations of customs regulations can result in both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can encompass imprisonment, reflecting the seriousness with which the Australian government treats breaches of customs laws. The specific maximum penalties would be governed by the broader provisions of the Customs Act 1901 and related legislation.