EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609945
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 air conditioners on 6 June 2006.
Instrument
TCO No 0609945 was made on 25 August 2006. It declares that those certain air 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 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. 0609945 is taken to have come into force on 6 June 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 Tariff Concession Instrument No. 0609945, enacted in 2006, was introduced to address a specific need within the Customs Act 1901 to facilitate the reduction of customs duties on certain imported goods. The instrument allows for the application of tariff concessions on goods that meet certain criteria, providing a lower rate of customs duty compared to the standard rates. This initiative was designed to assist businesses by lowering the cost of importing specific goods, thereby potentially increasing their competitiveness and the availability of products to consumers. The instrument was created under the authority granted by the Customs Act 1901, allowing the Chief Executive Officer of Customs to make Tariff Concession Orders when certain conditions are met, such as the absence of substitutable goods produced in Australia.
The policy objective of this legislation is to provide economic benefits by reducing the tariff on specified imported goods, thereby encouraging trade and potentially stimulating economic activity. By allowing certain air conditioners to benefit from a zero percent duty rate under this specific Tariff Concession Order, the government aims to support the importation and use of energy-efficient technologies, aligning with broader environmental and economic policy goals. This approach ensures that businesses can access cost-effective products while maintaining the integrity and fairness of the customs duty system.
Scope and Application
The Tariff Concession Order (TCO) No. 0609945, made under the Customs Act 1901, applies to specific air conditioners as requested by Energy Conservation Systems, with the concession coming into effect from 6 June 2006. This TCO pertains to entities involved in the importation of the specified air conditioners and is administered by the Chief Executive Officer of Customs. The primary purpose of the TCO is to provide a concession on the customs duty for these air conditioners, reducing the duty from the general rate of 5% to 0%. The geographic scope of this legislation is national, impacting all importers within Australia who deal with the specified goods.
The application of this TCO is contingent on the criteria set forth in section 269C of the Act, which mandates that no substitutable goods are being produced in Australia at the time of the application. The exclusions under section 269SJ ensure that certain goods, which cannot be subject to a TCO, are not affected by this order. The scope of the TCO does not extend to impose any liabilities on individuals or entities other than the Commonwealth and does not disadvantage anyone who had already imported goods before the effective date of the TCO. The order was made following the publication of an invitation for submissions in the Gazette, with no submissions received, thereby proceeding without opposition.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0609945 are contained within the Customs Act 1901 (the Act) and specifically address the process for granting Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P(3)). These sections outline the criteria that must be satisfied for the Chief Executive Officer of Customs (the CEO) to approve an application for a TCO, which includes ensuring that no substitutable goods are produced in Australia on the day the application was lodged (section 269C). Additionally, the instrument specifies the rate of customs duty that applies to the goods subject to a TCO (section 269P(3)). This particular TCO, No. 0609945, applies to certain air conditioners, granting them a zero rate of duty as opposed to the general rate of 5%.
Under the Customs Act, parties applying for a TCO must ensure their applications meet the core criteria set out in section 269C. This requires the applicant to demonstrate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO has a duty to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice. Once the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Tariff Concession Instrument No. 0609945 imposes several obligations on the parties it governs. Firstly, applicants for a TCO must ensure their applications meet the core criteria, which includes demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties and must consider any submissions received before making a decision. Once a TCO is made, it is taken to have come into force on the day the application was lodged (subsection 269S(1)). The TCO does not affect the rights of any person as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted before the date of registration.
There are no specific offences, penalties, or consequences for breach outlined in the Tariff Concession Instrument No. 0609945 itself. However, the Customs Act 1901 and the Customs Tariff Act 1995 provide for offences and penalties related to customs duty and tariff matters. For instance, section 232 of the Customs Act imposes penalties for offences related to the importation of goods, including the payment of duties and charges. The maximum penalty for these offences can be significant, including substantial fines and potential imprisonment. Additionally, section 134 of the Customs Act imposes penalties for providing false or misleading information to a Customs officer, with penalties including fines and imprisonment. It is important for parties governed by these instruments to comply with all requirements and obligations to avoid potential penalties and legal consequences.