EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619084
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.
Target Australia Pty Ltd applied for a TCO in respect of certain domestic air conditioners on 29 November 2006.
Instrument
TCO No 0619084 was made on 09 May 2007. It declares that those certain domestic 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 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. 0619084 is taken to have come into force on 29 November 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 Australian Parliament, establishes a framework for the application and administration of customs duties and related matters. One of the significant features of this Act is the ability to grant tariff concessions through Tariff Concession Orders (TCOs). These orders are designed to provide relief from customs duties for certain goods, which is particularly important for industries where local production of equivalent goods is not feasible. The Customs Act 1901 was amended to include these provisions to address the need for a more flexible customs duty regime that can respond to specific economic and industrial circumstances. The objective is to encourage the importation of goods that are not produced domestically, thereby supporting industries that rely on imported components or finished products. The enactment of this legislation ensures that the Australian economy can benefit from international trade while also protecting local industries where applicable.
Scope and Application
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to specified goods. These orders are made in response to applications from individuals or entities who are seeking duty concessions for particular goods, provided the goods are not specified in section 269SJ of the Act as ineligible for such concessions. The core criteria for a TCO application to be approved includes the condition that, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. The TCO applies across Australia and affects the rights of importers by allowing them to claim refunds for duties paid on the specified goods since the date the TCO is taken to have come into force. The Act ensures that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO was registered. The application and approval process for TCOs involve public consultation, as the CEO must publish a notice in the Gazette inviting submissions from any interested parties.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0619084, focus on the process and criteria for granting Tariff Concession Orders (TCOs). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, they must then decide if the application meets the core criteria (section 269C). These criteria include the requirement that no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D, 269E, and 269P(3). If the CEO is satisfied that the application meets these criteria, they are mandated to issue a written TCO, as stated in section 269P(3).
The Act imposes several obligations on the parties involved. Firstly, applicants such as Target Australia Pty Ltd must ensure that their applications meet the specified criteria and provide all necessary information. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO. The CEO must consider these submissions and make a decision based on the evidence presented. Additionally, the CEO must ensure that any TCO made does not disadvantage persons other than the Commonwealth or impose liabilities on them for actions taken before the TCO's registration.
Offences and penalties under this legislation are not explicitly detailed in the Act. However, any failure to comply with the requirements for applying for a TCO or providing misleading information could potentially lead to administrative consequences. While the Act does not specify a criminal penalty for breaches, it is likely that any such breaches could be subject to review or challenge in a court of law, with potential consequences including the invalidation of the TCO or other administrative actions taken against the non-compliant party.