EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715510
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.
Hagemeyer Appliances Pty Ltd applied for a TCO in respect of certain portable air conditioners on 17 September 2007.
Instrument
TCO No 0715510 was made on 23 November 2007. It declares that those certain portable 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. 0715510 is taken to have come into force on 17 September 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 Parliament of Australia, was amended to introduce a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (CEO). This legislation aimed to address the need for a streamlined process to reduce customs duties on specific goods, thereby facilitating trade and providing economic benefits. The 2007 instrument, Tariff Concession Instrument No. 0715510, was introduced to provide tariff concessions on certain portable air conditioners, reducing their duty from 5% to free. The CEO determined that no substitutable goods were produced in Australia for these products, meeting the core criteria set out in section 269C of the Act. The instrument was published in the Gazette with no objections received, and it came into force on the date of the application, 17 September 2007. This measure ensures that the rights of importers are positively impacted, allowing them to apply for duty refunds on imports made since the effective date of the concession.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply reduced rates of customs duty on certain goods. This process is available to applicants who can demonstrate that the goods in question do not have substitutable Australian-made alternatives and are not specified in section 269SJ of the Act as ineligible for such concessions. The Act mandates that a TCO application meets core criteria if, on the day of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. The TCO scheme applies Commonwealth-wide and its application is facilitated through subordinate instruments, extending its reach and applicability to specific goods based on the conditions and criteria outlined in the Act. Notably, the TCO does not affect existing rights or impose liabilities on individuals or entities other than the Commonwealth, thereby safeguarding the interests of those who import the affected goods.
Key Provisions
The main operative sections of the Customs Act 1901, as detailed in the Explanatory Statement, pertain to the process of applying for and granting Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, and 269S). Specifically, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is valid, the CEO must determine if it meets the core criteria outlined in section 269C, which includes assessing whether any substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to a prescribed rate of duty, as specified in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. When an application for a TCO is received, the CEO must ensure it is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (section 269K(1)). In the case of TCO No. 0715510, the CEO did not receive any submissions, indicating that no objections were raised against the concession. Additionally, the CEO must ensure that the TCO does not affect the rights of any person adversely or impose any liabilities on them in respect of actions taken before the TCO's effective date (subsection 269S(1)).
The consequences for breaching the provisions of the Customs Act 1901 are not explicitly detailed in the Explanatory Statement. However, given the nature of the Act and the responsibilities of the CEO, breaches could potentially result in administrative penalties. For instance, incorrect decisions regarding TCO applications might lead to financial losses for the Commonwealth or unfair advantages for certain parties. While specific penalties are not mentioned, breaches of customs legislation generally attract fines or other penalties as prescribed by the relevant laws. The precise penalties would depend on the nature and severity of the breach, as well as any other applicable legislation.