EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800662
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.
John Holland Pty Ltd applied for a TCO in respect of certain environmental conditioning plant on 11 January 2008.
Instrument
TCO No 0800662 was made on 04 April 2008. It declares that those certain environmental conditioning plant 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. 0800662 is taken to have come into force on 11 January 2008.
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 enacted to provide a comprehensive framework for the administration of customs and excise duties in Australia. This Act was established to ensure efficient and effective management of customs and excise matters, including the regulation of the import and export of goods. One of the mechanisms introduced under the Customs Act is the Tariff Concession Order (TCO) scheme, which was designed to address the problem of high customs duty rates on certain goods that have no domestic substitutes, thereby promoting economic efficiency and international competitiveness. The Parliament of Australia introduced this scheme to allow for tariff concessions on goods that are not produced in Australia, thereby reducing the financial burden on businesses and consumers. The objective of this legislative instrument is to facilitate the reduction of customs duties on specific goods, as demonstrated by the Tariff Concession Instrument No. 0800662, which was enacted to provide tariff concessions on certain environmental conditioning plant, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0800662, made under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, namely certain environmental conditioning plant, and is relevant to persons or entities importing these goods into Australia. The instrument operates to reduce the rate of customs duty from the general rate of 5% to free duty for the specified goods. This applies nationally across Australia and is subject to the conditions and criteria set out in the Customs Act 1901. The instrument is effective from the date the application for the tariff concession was lodged, which was 11 January 2008, and the concession does not affect any existing rights or liabilities incurred before this date. Any person, excluding the Commonwealth, can apply for a tariff concession order if certain criteria are met, including that no substitutable goods are produced in Australia in the ordinary course of business. The Chief Executive Officer of Customs must consider such applications and can make a written order if the criteria are satisfied. The application process also involves an invitation for submissions from interested parties, although in this instance, no submissions were received.
Key Provisions
The main operative sections of the Customs Act 1901, as relevant to this Tariff Concession Order (TCO), include sections 269C, 269F, 269P, and 269SJ (subsection 269K(1) is also relevant for the consultation process). Section 269F allows a person to apply to the Chief Executive Officer of Customs (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, which are goods that cannot be subject to a TCO, the CEO must then decide whether the application meets the core criteria set out in section 269C. If these criteria are met, 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 applies. In this case, the TCO applies to certain environmental conditioning plant, and it declares that these goods are subject to item 50 of Schedule 4 to the Tariff, with a resulting duty rate of free, as opposed to the general rate of 5%.
The obligations and requirements imposed by the Act on the parties it governs include the need for a person to apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ. The CEO must then assess whether the application meets the core criteria in section 269C. This involves determining if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. However, the explanatory statement does not specify the exact offences, penalties, or consequences for breach. It is important to note that 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, as they 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. In this specific case, no submissions were received in response to the published notice in the Gazette, indicating that no objections were raised against the making of the TCO.