EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720375
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.
United Group Infrastructure Pty Ltd applied for a TCO in respect of certain axial fans on 29 November 2007.
Instrument
TCO No 0720375 was made on 8 February 2008. It declares that those certain axial fans 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. 0720375 is taken to have come into force on 29 November 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 peron 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, provides a framework for the regulation of customs and excise through various instruments including Tariff Concession Orders (TCOs). The Act was amended to include provisions for TCOs in order to address economic disparities and stimulate the production of certain goods within Australia by providing tariff relief. This was introduced to ensure that Australian industries could compete more effectively with imported goods by lowering the duty on specific products, provided no similar goods were being produced domestically. TCO No. 0720375, made under the authority of the Customs Act 1901, was introduced to provide tariff concessions on certain axial fans, effectively reducing the customs duty on these goods from the standard 5% to zero. This concession was granted after the Chief Executive Officer of Customs determined that no substitutable goods were being produced in Australia, thereby meeting the core criteria set out in the Act. The instrument aims to support the import and local availability of these fans, potentially benefiting industries reliant on such equipment.
Scope and Application
The Tariff Concession Instrument No. 0720375 under the Customs Act 1901 applies to certain axial fans, granting them tariff concessions. This legislation is applicable to entities such as United Group Infrastructure Pty Ltd, which can apply for a Tariff Concession Order (TCO) to benefit from reduced customs duties. The Act operates within the Commonwealth jurisdiction and does not affect the rights of any person, except the Commonwealth, in relation to transactions prior to the registration of the TCO. The scope of the Act extends to ensuring that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. The application of this Act can be extended or modified through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable tariff items. Any exclusions or exemptions are defined under section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO.
Key Provisions
The Tariff Concession Order No. 0720375 (referred to as TCO No. 0720375 in the Explanatory Statement) is an instrument made under the Customs Act 1901 (the Act). Specifically, it applies to the scheme where Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) as per section 269F of the Act. This TCO was issued on 8 February 2008, following an application by United Group Infrastructure Pty Ltd for certain axial fans on 29 November 2007. The TCO applies to these axial fans, specifying that they are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995 (the Tariff), and the duty rate for these goods is set at free, whereas the general rate is 5%. This concession applies retroactively from the date the application was lodged, which is 29 November 2007, as stipulated by subsection 269S(1) of the Act.
Under section 269C of the Act, the CEO must determine if the application meets the core criteria. For a TCO application to meet these criteria, there must be no substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D and 269E of the Act. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, which led to the approval of the TCO. Section 269P(3) of the Act requires the CEO to issue a written order if the application meets the core criteria, which is what happened here with TCO No. 0720375.
The Act imposes certain obligations and requirements on the parties involved. Firstly, the CEO must ensure that the application meets the core criteria by verifying that no substitutable goods are produced in Australia in the ordinary course of business. Secondly, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1) of the Act. In this case, the CEO did not receive any submissions in response to the published notice. Additionally, the Act ensures that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration, thereby not disadvantaging that person or imposing liabilities on them for actions taken before the registration date. Importers, however, will benefit from the rights conferred under paragraph 126(1)(r) of the Regulations, which allows them to apply for a refund of duty on goods imported since the day the TCO came into force.
The Act does not explicitly outline specific offences, penalties, or consequences for breaches of the TCO provisions. However, any failure to comply with the terms of the TCO or the underlying Act could potentially lead to legal consequences under other sections of the Customs Act 1901, including fines and imprisonment. For instance, deliberately misrepresenting facts to obtain a TCO could be construed as fraud under section 265 of the Act, which carries a maximum penalty of 10 years imprisonment. The specific consequences would depend on the nature and severity of the breach, and would be adjudicated in accordance with the relevant provisions of the Act.