EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605620
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.
Australian Automotive Air Pty Ltd applied for a TCO in respect of certain condenser tubes on 24 March 2006.
Instrument
TCO No 0605620 was made on 16 June 2006. It declares that those certain condenser tubes 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 0%.
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. 0605620 is taken to have come into force on 24 March 2006.
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 was enacted by the Australian Parliament to facilitate the administration of customs and excise duties, among other things. One of the mechanisms under the Act is the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing duty concessions for specific goods. The problem or gap addressed by this particular legislation is the facilitation of a duty concession for certain condenser tubes, as requested by Australian Automotive Air Pty Ltd. The instrument, Tariff Concession Instrument No. 0605620, was introduced to address the specific application made by the company. The policy objective here is to provide a tariff concession where no substitutable goods are produced in Australia, thereby encouraging the importation of these goods and potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect on 24 March 2006.
Scope and Application
The Tariff Concession Order No. 0605620 applies to the goods specified in the application made by Australian Automotive Air Pty Ltd, which in this case are certain condenser tubes. This Act falls under Part XVA of the Customs Act 1901, which pertains to the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders facilitate the application of a lower rate of customs duty to the goods in question, provided they meet the core criteria outlined in the Act. The application process is initiated when an eligible person applies to the CEO for a TCO in respect of goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO's decision to grant a TCO is contingent on the absence of substitutable goods produced in Australia at the time of application, as per sections 269C and 269D of the Act. The geographic and jurisdictional reach of this Act is national, as it pertains to the importation of goods into Australia and the application of customs duties. The Act does not impose any liabilities on any person other than the Commonwealth and does not affect the rights of any person as at the date of registration. Any person who considers that there are reasons why the TCO should not be made can lodge a submission with the CEO, as stipulated in section 269K(1) of the Act. The TCO is effective from the date the application was lodged, which in this case is 24 March 2006, and does not retroactively affect any transactions prior to this date.
Key Provisions
The Tariff Concession Instrument No. 0605620, under the Customs Act 1901, introduces specific provisions regarding Tariff Concession Orders (TCOs) for certain condenser tubes. Section 269C of the Act stipulates that a TCO application is deemed to meet the core criteria if, on the date of application, no substitutable goods were being produced in Australia in the ordinary course of business (section 269D and 269E of the Act define these terms). If the Chief Executive Officer of Customs (CEO) determines that the application meets these criteria, they are required to issue a TCO as per section 269P(3), specifying that the goods in question are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995. For the condenser tubes in question, item 50 of this schedule applies, reducing the duty rate from 5% to 0%.
Under the Act, several obligations are placed on the parties involved. The CEO must assess the application against the core criteria and, if satisfied, make a written TCO. Additionally, as per subsection 269K(1) of the Act, the CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted. In this case, no submissions were received. The TCO itself, as per subsection 269S(1), is effective from the date the application was lodged, which for this TCO is 24 March 2006.
The consequences of non-compliance with the Act's provisions are significant. Any breach of the terms set out in the TCO may result in civil or criminal penalties, depending on the nature and severity of the offence. While the specific penalties are not detailed in the explanatory statement, under the Customs Act 1901, penalties for non-compliance can include fines and imprisonment, reflecting the seriousness of the legislative framework governing customs duties and tariff concessions.