EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711574
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.
Hamon Australia Pty Ltd applied for a TCO in respect of certain cooling tower axial fan blades on 18 July 2007.
Instrument
TCO No 0711574 was made on 02 October 2007. It declares that those certain cooling tower axial fan blades 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. 0711574 is taken to have come into force on 18 July 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 was amended to include a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on specified goods. Enacted by the Parliament of Australia, this legislative framework was designed to address the gap in tariff concessions, ensuring that Australian businesses and importers benefit from reduced duties on goods where no domestic substitutes are produced. This system was introduced to foster economic growth by making imported goods more competitive in the Australian market, thus encouraging trade and investment. The policy objective behind the introduction of TCOs is to support industries by reducing the cost of imported goods, thereby enhancing their competitiveness against locally produced alternatives.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of Tariff Concession Orders (TCOs) to reduce customs duty on certain goods. This legislative instrument applies to any person who applies for a TCO in respect of goods, provided the application complies with the core criteria set forth in the Act. The primary condition for eligibility is that no substitutable goods, as defined in section 269D, are produced in Australia in the ordinary course of business at the time of application. The application process involves the Chief Executive Officer of Customs (CEO) assessing the application and, if satisfied that it meets the criteria, issuing a written order that declares the goods to which a specific item in Schedule 4 of the Customs Tariff Act 1995 applies. In the case of Tariff Concession Instrument No. 0711574, certain cooling tower axial fan blades were subject to a TCO, resulting in a duty rate of free, down from the general rate of 5%. The Act provides a mechanism for public consultation upon acceptance of an application as valid, although in this instance, no submissions were received. The TCO comes into force on the date the application is lodged, and it does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, thereby ensuring that only the rights of importers are beneficially impacted, allowing them to apply for duty refunds on imports made since the TCO's effective date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0711574 under the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCOs) by parties such as Hamon Australia Pty Ltd. Specifically, section 269F allows individuals or entities to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO determines that the application is not for goods specified in section 269SJ, which lists goods ineligible for TCOs, the CEO must assess whether the application meets the core criteria outlined in section 269C. This involves ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. If these criteria are met, the CEO is required under subsection 269P(3) to issue a written order (TCO), declaring that the goods in question are subject to a specific rate of duty as outlined in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties governed by it primarily revolve around the application process for TCOs. Section 269K(1) mandates that the CEO, upon accepting a TCO application as valid, must publish a notice in the Gazette inviting any interested parties to submit any objections they may have. Hamon Australia Pty Ltd, as the applicant, must ensure that their application complies with all the stipulated criteria and provides all necessary documentation. The CEO, on their part, has the obligation to thoroughly review the application and any submissions received, and to make a decision based on the statutory requirements.
In terms of consequences for non-compliance or breaches of the Act, specific offences and penalties are not detailed in the provided text. However, it is implied that any failure to comply with the statutory requirements for TCO applications or any misrepresentation of facts could potentially lead to the application being rejected or the TCO being revoked. Such outcomes could have significant financial implications for the applicant, as well as possible administrative or legal repercussions. While the text does not specify maximum penalties, breaches of customs legislation generally attract penalties under the Customs Act 1901 and associated regulations, which could include fines and, in serious cases, criminal charges.