EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516747
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.
Cooltemp Pty Ltd applied for a TCO in respect of certain twin tube air-conditioner parts on 1 December 2005.
Instrument
TCO No 0516747 was made on 13 February 2006. It declares that those certain twin tube air-conditioner 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. 0516747 is taken to have come into force on 1 December 2005.
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. 0516747, enacted in 2006, amends the Customs Act 1901 to provide tariff concessions for specific goods. This legislative instrument was introduced to address the issue of applying lower customs duty rates to certain imported goods, specifically twin tube air-conditioner parts, which were not produced in Australia and had no substitutable domestic products. The instrument was enacted by the Chief Executive Officer of Customs, pursuant to the authority granted under section 269F of the Customs Act 1901. The policy objective of this legislation is to provide relief to businesses and consumers by reducing the duty on specific imported goods, thereby making them more competitively priced in the Australian market. The enactment of this instrument ensures that importers of such goods can potentially benefit from a refund of duties paid on imports since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0516747, made under Part XVA of the Customs Act 1901, applies to entities or individuals seeking tariff concessions for specific goods, in this case, certain twin tube air-conditioner parts. The instrument is applicable to any goods specified in the order, provided that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The geographic reach of this legislation is national, as it pertains to the application of customs duties under Commonwealth law. The instrument was issued following an application by Cooltemp Pty Ltd on 1 December 2005, and it came into force on the same date. The application process requires the Chief Executive Officer of Customs to assess whether the core criteria are met, which involves ensuring that no substitutable goods are produced domestically. The instrument exempts the goods in question from the general rate of duty, setting their rate at free, and allows for the possibility of duty refunds for importers of these goods since the effective date of the concession. The instrument does not disadvantage any person other than the Commonwealth and imposes no liabilities on any person.
Key Provisions
The primary operative sections of the Customs Act 1901, as outlined in the explanatory statement, are sections 269C, 269F, 269K, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specific goods. Section 269C sets forth the core criteria that must be satisfied for the CEO to consider making a TCO. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, a written TCO must be issued. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Lastly, section 269S(1) specifies that a TCO is taken to have come into force on the date the application for the TCO was lodged.
The obligations imposed on the parties by this Act are primarily on the CEO of Customs. The CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. If the application meets the core criteria outlined in section 269C, the CEO must make a written TCO, as required by section 269P(3). Additionally, the CEO must publish a notice in the Gazette, as stipulated in section 269K(1), and invite submissions from any interested parties. The CEO's duty is to carefully consider any submissions received and decide whether to proceed with the TCO based on the information and arguments presented.
The legislation also outlines specific consequences for breaches, although it does not detail specific penalties. Generally, under Australian law, breaches of customs regulations can result in various civil and criminal penalties. Civil penalties may include fines and the recovery of duties and taxes owed. Criminal penalties can range from fines to imprisonment, depending on the severity of the breach and whether it is deemed an offence under the Customs Act 1901 or other related legislation. The maximum penalties would be determined by the specifics of the breach and the relevant provisions of the Act or subsidiary legislation. It is important for those subject to the Act to comply fully with its requirements to avoid these potential consequences.