EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612384
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 Airconditioning Pty Ltd applied for a TCO in respect of certain condenser air conditioner parts on 24 July 2006.
Instrument
TCO No 0612384 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. 0612384 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, enacted by the Commonwealth Parliament, includes a framework for the creation of Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on specified goods. This legislative mechanism addresses the problem of ensuring that certain goods, which are not produced domestically, can enter the Australian market at a reduced tariff rate, thereby supporting industry and consumers by making these goods more affordable. The policy objective is to encourage the importation of goods that are not manufactured locally, thus fostering competition and benefiting consumers. The instrument, Tariff Concession Instrument No. 0612384, was made under the authority of the Act to provide tariff concessions for certain condenser air conditioner parts, effective from the date the application was lodged, 24 July 2006, without imposing any new liabilities or disadvantaging existing parties.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which provide for lower rates of customs duty on specified goods. This mechanism applies to any person who may apply for a TCO in respect of goods, provided the application does not pertain to goods that are ineligible under section 269SJ of the Act. A TCO application is deemed to meet the core criteria if, on the day of application, no substitutable goods are being produced in Australia in the ordinary course of business, as outlined in sections 269C, 269D, and 269E of the Act. Once the CEO determines that an application meets these criteria, they must issue a written order, which becomes effective from the date the application was lodged. The TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth, thereby ensuring that it only benefits those importing the specified goods post the effective date, who may also apply for duty refunds under the Regulations.
Key Provisions
The Tariff Concession Instrument No. 0612384, under the Customs Act 1901, is primarily concerned with the application and granting of Tariff Concession Orders (TCOs) for certain goods. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods in question are not specified in section 269SJ as those that cannot be subject to a TCO. The CEO must then assess whether the application meets the core criteria set out in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods, as defined by section 269D and 269E, are goods produced in Australia that can be used in the same way as the goods for which the TCO is being sought.
The obligations under this legislation require the CEO to ensure that the application for a TCO is valid and meets the specified criteria before making a decision. Once satisfied that the application meets the core criteria, the CEO must make a written TCO, as stipulated in section 269P(3). This written order must specify the goods subject to the TCO and declare that these goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For the specific case of Carrier Airconditioning Pty Ltd, the TCO No. 0612384 was issued on 13 October 2006, reducing the duty on certain condenser air conditioner parts from 10% to free. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions against the TCO application, although in this instance, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could lead to various consequences. While the specific offences and penalties for breach are not detailed in the explanatory statement, general provisions within the Customs Act may apply. These could include fines or imprisonment for offences related to false statements or misrepresentations made during the application process. The maximum penalties would depend on the severity of the breach and could be determined by the courts. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any new liabilities on individuals or entities.