EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825491
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.
Origin Energy Power applied for a TCO in respect of certain evaporative cooler on 07 August 2008.
Instrument
TCO No 0825491 was made on 31 October 2008. It declares that those certain evaporative cooler 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. 0825491 is taken to have come into force on 07 August 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 by the Australian Parliament to provide a comprehensive framework for customs regulation, including the imposition of customs duty on imported goods. The Act was introduced to address the need for a structured approach to regulating imports and collecting revenue through customs duties. One of the mechanisms established under the Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duty on certain goods, provided specific criteria are met. The TCO scheme, particularly under Part XVA, enables the Chief Executive Officer of Customs to grant tariff concessions to applicants who demonstrate that the goods in question are not produced in Australia and have no substitutable goods available domestically. The primary objective of this legislative framework is to facilitate trade by reducing the cost of imported goods, thereby promoting economic efficiency and competitiveness.
On 31 October 2008, a Tariff Concession Order (No. 0825491) was issued under the Customs Act 1901, addressing an application from Origin Energy Power for certain evaporative coolers. This order was made after it was determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria set out in the Act. Consequently, the general rate of duty of 5% was replaced with a duty-free rate for these specific goods, effective from the date the application was lodged, 7 August 2008. The order was made without any submissions against it, reflecting a consensus on the appropriateness of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0825491, made under the Customs Act 1901, pertains to the application of tariff concessions for certain evaporative coolers, allowing for a reduction in the duty rate for these goods. This instrument applies specifically to goods that are subject to a Tariff Concession Order (TCO), where the Chief Executive Officer of Customs determines that no substitutable goods are produced in Australia in the ordinary course of business. This determination is made in accordance with the criteria outlined in sections 269C and 269D of the Act. The application for a TCO was submitted by Origin Energy Power on 7 August 2008, and following the CEO's satisfaction that the core criteria were met, Instrument No. 0825491 was issued on 31 October 2008, declaring that the specified evaporative coolers would be subject to a zero duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995. This TCO applies nationally within the Commonwealth of Australia and impacts the importation of the specified goods by reducing their duty from the general rate of 5% to free. The TCO does not affect existing rights or impose new liabilities on any person other than the Commonwealth, and it does not disadvantage any party as it only applies to transactions occurring from the date the TCO was deemed to have come into force.
Key Provisions
The Tariff Concession Instrument No. 0825491, under the Customs Act 1901, sets out the provisions for a Tariff Concession Order (TCO) in relation to certain evaporative coolers. According to section 269F, an application for a TCO can be made to the Chief Executive Officer (CEO) of Customs, provided the goods in question are not specified in section 269SJ, which lists goods that are ineligible for a TCO. The CEO must then determine whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged.
The Act imposes specific obligations on the CEO and applicants. The CEO must ensure that the application is valid and not in respect of goods specified in section 269SJ. Upon determining that the application meets the core criteria, the CEO is required to issue a written TCO under section 269P(3). Moreover, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of the TCO. However, in this case, no submissions were received.
Failure to comply with the requirements of the Customs Act 1901 may lead to various consequences. While the explanatory statement does not detail specific offences or penalties, the general provisions of the Act may include administrative actions, fines, or other sanctions for non-compliance. Additionally, section 269S(1) clarifies that the TCO will be effective from the date the application was lodged, ensuring that any duties payable are abated for imports of the specified goods from that date forward. Importantly, the TCO does not affect the rights of any person, except to the extent that it imposes no new liabilities on any party.