EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0834655
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 Pty Ltd applied for a TCO in respect of certain cooler assembly generator on 08 October 2008.
Instrument
TCO No 0834655 was made on 14 January 2009. It declares that those certain cooler assembly generator 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. 0834655 is taken to have come into force on 08 October 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, enacted by the Australian Parliament, establishes a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to provide tariff relief on certain goods. The primary problem this Act addresses is the potential for economic disadvantage faced by businesses when importing specific goods that have no Australian-made alternatives, as it enables the application for lower customs duty rates on these items. Under section 269F, an entity may apply to the CEO for a TCO if the goods in question are not prohibited under section 269SJ and meet the core criteria outlined in section 269C. Once an application meets these criteria, as was the case with Tariff Concession Order No. 0834655 concerning cooler assembly generators, the CEO issues a written order effective from the date the application was lodged, in this instance, 8 October 2008. This policy aims to support businesses by reducing import costs, thus facilitating competition and potentially lowering consumer prices without disadvantaging existing stakeholders or imposing new liabilities.
Scope and Application
The Customs Act 1901 applies to all persons and entities involved in the importation of goods into Australia, with specific provisions under Part XVA concerning Tariff Concession Orders (TCOs). The Act allows for the application of lower rates of customs duty on goods specified in a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business. The Chief Executive Officer of Customs (CEO) has the authority to make a TCO if an application meets the core criteria outlined in the Act, and this decision is subject to public consultation. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. Any exclusions or exemptions are detailed in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The commencement of a TCO is effective from the date the application is lodged, and it does not affect the rights of persons or impose liabilities for actions taken prior to the order's registration. The Tariff Concession Instrument No. 0834655, made under this Act, applies specifically to certain cooler assembly generators and came into force on 8 October 2008, with the rate of duty for these goods set at free, as opposed to the general rate of 5%.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to this Tariff Concession Order (TCO) include section 269F, which allows for applications to the Chief Executive Officer of Customs (the CEO) for a TCO. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definition of terms such as "substitutable goods" and "ordinary course of business" are detailed in sections 269D, 269E, and 269B of the Act. If the CEO is satisfied that the application meets the core criteria, they are required under section 269P(3) to make a written order (a TCO) that specifies the goods to which the concession applies. In this case, TCO No. 0834655 was made on 14 January 2009, declaring that the cooler assembly generator in question are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the rate of duty being free instead of the general rate of 5%.
The obligations imposed on the parties or entities governed by this Act include the requirement for applicants to ensure that their applications for TCOs are valid and meet the core criteria as outlined in the Act. The CEO is obligated to review these applications and determine whether they meet the criteria, considering whether any substitutable goods were produced in Australia. If the application meets the criteria, the CEO must then issue a written TCO. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in subsection 269K(1) of the Act. In this instance, no submissions were received in response to the published notice.
The Act includes provisions for offences, penalties, and civil or criminal consequences for breaches. However, specific penalties are not outlined in the explanatory statement for this particular TCO. Generally, under Australian law, breaches of customs regulations can result in significant penalties, including fines and imprisonment, depending on the severity of the offence. The Act and associated regulations provide detailed guidance on these potential penalties, which can vary based on the specific breach and its impact. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person (other than the Commonwealth) as at the date of registration.