EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701082
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 indoor air conditioner parts on 19 January 2007.
Instrument
TCO No 0701082 was made on 13 April 2007. It declares that those certain indoor 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. 0701082 is taken to have come into force on 19 January 2007.
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 administration of customs duties and provides for the creation of Tariff Concession Orders (TCOs) through Part XVA. This instrument aims to address the problem of ensuring that Australian industries have access to necessary components or goods that are not produced domestically, thereby facilitating competitive pricing and encouraging local manufacturing where feasible. The Tariff Concession Instrument No. 0701082, issued on 13 April 2007, grants a tariff concession for certain indoor air conditioner parts, reducing the general customs duty rate from 10% to free, effective from the date of the application, 19 January 2007. The policy objective behind this concession is to support Australian industries by lowering the cost of imported components that have no locally produced substitutes, thus aiding economic efficiency and potentially fostering local production in the future.
Scope and Application
The Tariff Concession Instrument No. 0701082 applies to goods for which a Tariff Concession Order (TCO) has been granted under Part XVA of the Customs Act 1901. This legislation is relevant to entities and individuals who import or seek to import the specified goods, and who would benefit from the tariff concessions. The scope of the Act extends to those goods that are not produced in Australia and are not listed in section 269SJ of the Act as ineligible for a TCO. The geographic reach of the Act is national, as it pertains to customs duty across Australia. The application of the TCO is contingent upon the Chief Executive Officer of Customs determining that the goods in question meet the core criteria, specifically that no substitutable goods are produced in Australia. The instrument does not disadvantage any person, including importers who may apply for a refund of duty on goods imported since the TCO is deemed to have come into force on 19 January 2007. The Act's application can be extended or restricted through subordinate instruments, which may provide further detail on the types of goods eligible for tariff concessions or the specific conditions under which such concessions apply.
Key Provisions
The Customs Act 1901, under Part XVA, allows for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO) (s 269F). The main operative sections of the Act relevant to TCOs include section 269C, which specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Further, section 269B clarifies that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ by section 269E, and ‘substitutable goods’ by section 269D 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 (s 269B). If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
The obligations and requirements imposed by the Act on the parties governed by it include the submission of a TCO application to the CEO (s 269F), which must not be in respect of goods specified in section 269SJ (s 269SJ). The CEO is obligated to ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). If no submissions are received, the CEO may proceed to make the TCO. Additionally, once a TCO is made, importers of the specified goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (s 126(1)(r) of the Regulations).
The Act does not specify any offences, penalties, or civil/criminal consequences for breach of its provisions in relation to TCOs. However, the TCO itself 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 (s 269S(1)). The rights of importers will be beneficially affected, and under the Regulations, importers of such goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.