EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0841150
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.
Hvacar Supplies Pty Ltd applied for a TCO in respect of certain centrifugal pumps on 25 November 2008.
Instrument
TCO No 0841150 was made on 27 February 2009. It declares that those certain centrifugal pumps 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. 0841150 is taken to have come into force on 25 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. 0841150, enacted under the Customs Act 1901, aims to facilitate tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to reduce or eliminate customs duty on these goods if certain criteria are met. This instrument was introduced to address the gap in the tariff regime where certain goods could benefit from reduced customs duty if they are not substitutable by Australian-produced goods and meet other specified conditions. The instrument was enacted by the relevant legislature, and its policy objective is to provide tariff relief for goods that would otherwise face higher duty rates, thereby supporting the economic interests of importers and potentially benefiting consumers through reduced costs. The instrument came into effect on the day the application was lodged, ensuring that any imports of the specified goods since that date are eligible for the concession.
Scope and Application
The Tariff Concession Instrument No. 0841150 under the Customs Act 1901 applies to Hvacar Supplies Pty Ltd in their capacity as an applicant for a Tariff Concession Order (TCO) in respect of certain centrifugal pumps. The instrument is specifically tailored to those goods identified in the application and declared under item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act enables the Chief Executive Officer of Customs to make a TCO when certain conditions are met, notably when no substitutable goods are produced in Australia in the ordinary course of business. The instrument’s jurisdictional reach is national, governed by the Commonwealth’s authority to regulate customs duties. There are no exclusions or exemptions stated for this particular TCO, but it is subject to the broader provisions of the Customs Act 1901, which may include specific exclusions as per section 269SJ. The application of this Act is extended through subordinate instruments such as the Customs Tariff Act 1995, which provides the tariff schedule against which the concessions are measured.
Key Provisions
The primary operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, and 269P. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) (section 269P(3)). These core criteria, detailed in section 269C, require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269B defines the terms 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods.'
The obligations and requirements imposed by the Act on the parties or entities it governs include the duty for the CEO to assess whether an application for a TCO meets the core criteria, as specified in section 269C. If the application is valid and meets these criteria, the CEO is mandated to make a written TCO (section 269P(3)). The CEO must also publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In the case of TCO No. 0841150, no submissions were received in response to this notice. Furthermore, a TCO comes into force on the day on which the application for the TCO was lodged (subsection 269S(1)), meaning that the TCO's effects are retroactive to the date of application.
The Act provides for potential civil and criminal consequences for breaches of its provisions. Specifically, subsection 269S(1) indicates that a TCO comes into force on the day the application is lodged, but it does not affect the rights of a person (other than the Commonwealth) as at the date of registration in a way that disadvantages that person or imposes 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 are beneficially affected, and under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The TCO does not impose any liabilities on any person. Failure to comply with the provisions of the Customs Act 1901 may result in legal actions, fines, or other penalties as prescribed by law.