EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839784
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.
Gaf Control (Sales) Pty Ltd applied for a TCO in respect of certain ceiling exhaust fans 50W on 13 November 2008.
Instrument
TCO No 0839784 was made on 06 February 2009. It declares that those certain ceiling exhaust fans 50W 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. 0839784 is taken to have come into force on 13 November 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 Tariff Concession Instrument No. 0839784 was enacted in 2009 under the Customs Act 1901. This legislation was introduced to address the problem of ensuring that certain imported goods, in this case specific ceiling exhaust fans, receive preferential tariff treatment when they are not being produced in Australia. The Customs Act 1901 allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, which reduce the rate of customs duty on specified goods. The policy objective of the Act is to provide a streamlined process for the application and approval of TCOs, ensuring that businesses importing these goods benefit from lower customs duty rates, thereby encouraging trade and potentially lowering costs for consumers. The enacting body is the Australian Parliament, and the intent is to facilitate economic efficiency by reducing unnecessary tariff barriers on certain imported goods.
Scope and Application
The Customs Act 1901, specifically through Part XVA, outlines the framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who may apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ of the Act as ineligible for concession. The scope of the Act encompasses goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. The geographic reach of this Act is national, extending to all entities and industries involved in the importation of goods subject to customs duty. Exclusions are limited to goods specified in section 269SJ, and the application of the Act may be further detailed through subordinate instruments. The Tariff Concession Instrument No. 0839784, made under this Act, effectively grants a tariff concession for certain 50W ceiling exhaust fans, reducing their duty rate to free from the general rate of 5%. This order came into force on the date the application was lodged, 13 November 2008, and does not retroactively affect any existing rights or liabilities.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) under which this Tariff Concession Instrument (TCO) operates are sections 269C, 269B, 269E, 269D, 269SJ, 269P, and 269K. Specifically, section 269C outlines the core criteria for a TCO application, requiring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer (CEO) of Customs must issue a written order (the TCO). Section 269K requires the CEO to publish a notice in the Gazette inviting submissions against the TCO application, and section 269SJ specifies goods that cannot be subject to a TCO.
The Act imposes several obligations on parties involved in the TCO process. Firstly, it requires applicants, such as Gaf Control (Sales) Pty Ltd in this case, to submit a valid application to the CEO, ensuring that the application does not pertain to goods specified in section 269SJ. The CEO must then assess the application against the core criteria and, if satisfied, make a written TCO order. Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. This ensures transparency and allows stakeholders to voice any objections.
The Act also specifies consequences for breaches, although the text does not explicitly state any offences or penalties related to the TCO process itself. However, general provisions of the Customs Act 1901 and the Customs Tariff Act 1995 may apply to breaches of customs laws, including potential fines and imprisonment. The specific maximum penalties for breaches would be determined by the relevant sections of these Acts and any applicable regulations.
In summary, the Tariff Concession Instrument No. 0839784, under the Customs Act 1901, allows for tariff concessions on certain ceiling exhaust fans 50W, provided the CEO is satisfied that no substitutable goods were produced in Australia. The CEO must issue a written TCO order if the application meets the core criteria, and publish a notice in the Gazette for stakeholder submissions. The TCO does not disadvantage any person and provides benefits such as duty refunds to importers. Although specific penalties for breaches are not detailed in the text, general customs laws would apply in the event of non-compliance.