EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612371
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.
Carrier Air Conditioning Pty Ltd applied for a TCO in respect of certain condenser air conditioner parts on 24 July 2006.
Instrument
TCO No 0612371 was made on 13 October 2006. It declares that those certain condenser 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 10%. 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. 0612371 is taken to have come into force on 24 July 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 amended to introduce the scheme allowing for Tariff Concession Orders (TCOs) under Part XVA, to address the gap in providing tariff concessions for certain goods. Enacted by the Australian Parliament, the Act facilitates applications for TCOs by the Chief Executive Officer of Customs, which can provide a lower rate of customs duty for specified goods. The policy objective is to support economic efficiency and competitiveness by reducing the cost of importing goods that cannot be produced domestically, thereby encouraging trade and investment. Tariff Concession Instrument No. 0612371, made on 13 October 2006, is an example of this mechanism in action, where the CEO granted a concession for certain condenser air conditioner parts, reducing the duty from 10% to free. This instrument was introduced following an application by Carrier Air Conditioning Pty Ltd, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) that apply lower rates of customs duty on goods, provided certain criteria are met. This legislation applies to any person or entity that applies for a TCO, provided the goods in question are not specified as ineligible under section 269SJ of the Act, and the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business as per sections 269C and 269D. The instrument applies nationally and its provisions can be extended or modified through subordinate instruments. The application of this Act is limited by exclusions noted in section 269SJ and does not affect the rights of any person as at the date of registration, nor does it impose liabilities for actions taken prior to the TCO's effective date. The Tariff Concession Instrument No. 0612371, for example, was issued in response to an application by Carrier Air Conditioning Pty Ltd for tariff concessions on condenser air conditioner parts, effectively reducing the duty rate from 10% to free.
Key Provisions
The primary operative sections of the Customs Act 1901, particularly under Part XVA, establish a framework through which Tariff Concession Orders (TCO) can be issued by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269K, and 269S). A TCO application may be submitted by any person to the CEO for goods that are not specified in section 269SJ (section 269F). The CEO must then determine whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). If the CEO is satisfied with the application, they must make a written TCO declaring that the goods in question are subject to a prescribed tariff item (section 269P(3)).
The obligations imposed by the Act on the parties involved are primarily centred around the application and assessment processes. The CEO is required to publish a notice in the Gazette, inviting submissions from interested parties if a TCO application is accepted as valid (subsection 269K(1)). Additionally, the CEO must ensure that the application does not pertain to goods that cannot be subject to a TCO (section 269SJ). Upon satisfying the core criteria, the CEO is obligated to issue a TCO (section 269P(3)). For applicants, the obligation lies in ensuring their application meets the core criteria, particularly that no substitutable goods were produced in Australia at the time of application (section 269C).
Breaches of the provisions under the Customs Act 1901 may lead to various penalties and consequences. While the specific Act does not detail penalties for non-compliance, the broader Customs Act and associated regulations may impose civil or criminal penalties for breaches. These can include fines and, in severe cases, imprisonment. For instance, under section 238 of the Customs Act, any person who contravenes any provision of the Act or regulations may be liable to a penalty, which can extend to significant financial penalties depending on the severity and intent of the breach. Additionally, section 269Z of the Customs Act provides that any person who makes a false or misleading statement in an application for a TCO may be subject to criminal penalties, including fines and imprisonment.
In summary, the Tariff Concession Instrument No. 0612371 under the Customs Act 1901 establishes a process for issuing TCOs that reduce customs duty on specified goods. The CEO must ensure that applications meet core criteria and that no substitutable goods were produced in Australia. The TCO itself takes effect from the date of the application, and the rights of importers are beneficially affected. Any breaches of the Act's provisions may result in civil or criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach.