EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904232
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 fin fan cooler assemblies on 09 February 2009.
Instrument
TCO No 0904232 was made on 01 May 2009. It declares that those certain fin fan cooler assemblies 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. 0904232 is taken to have come into force on 09 February 2009.
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 amended with the introduction of Tariff Concession Orders (TCOs) to address the need for flexible tariff adjustments that could be made to meet specific economic or industry needs. This was enacted to provide a mechanism through which the Chief Executive Officer of Customs could lower customs duties on certain goods, thereby supporting industries and consumers by making goods more affordable. The Tariff Concession Instrument No. 0904232 was introduced on 01 May 2009 following an application by Origin Energy Power for a TCO on specific fin fan cooler assemblies. This instrument was created to provide tariff relief on these goods, reducing the duty from the general rate of 5% to free, effective from the date the application was lodged, 09 February 2009. The process involved ensuring no substitutable goods were produced in Australia at the time, and no objections were received during the consultation period. The objective was to facilitate the efficient importation of these goods, benefiting the rights of importers who could apply for duty refunds on goods imported since the commencement date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0904232, made under the Customs Act 1901, applies specifically to the goods for which Tariff Concession Orders (TCOs) are issued. In this case, the instrument pertains to certain fin fan cooler assemblies for which Origin Energy Power applied on 09 February 2009. The Act empowers the Chief Executive Officer of Customs (the CEO) to make TCOs, which confer a lower rate of customs duty on specified goods if certain criteria are met. The CEO must be satisfied that no substitutable goods are produced in Australia, meaning the goods in question are unique or do not have an Australian equivalent. This particular TCO was issued because no substitutable goods were being produced domestically at the time of the application. The TCO came into effect on the date the application was lodged, 09 February 2009, and it has no retrospective effect on the rights of any person other than the Commonwealth, thus preserving the rights of importers who can apply for a refund of duty for goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901, as referenced in section 269F, allows for the application of Tariff Concession Orders (TCOs) which can reduce the customs duty on specific goods. A TCO can be applied for by any person, provided the goods in question are not prohibited by section 269SJ. The Chief Executive Officer of Customs (CEO) must then determine whether the application meets the core criteria outlined in section 269C, which includes ensuring that no substitutable goods are being produced in Australia in the ordinary course of business as defined by sections 269D and 269E. If these criteria are satisfied, the CEO is mandated to issue a TCO as per subsection 269P(3). In the case of Instrument TCO No 0904232, made on 1 May 2009, the CEO declared that certain fin fan cooler assemblies are subject to a TCO, with a duty rate of free instead of the general 5%.
The obligations imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that their application adheres to the specified criteria and that the goods do not fall under the restricted category outlined in section 269SJ. The CEO has the responsibility to publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the TCO, as required by subsection 269K(1). Should the CEO receive no submissions, the process can proceed without opposition. Additionally, the Act ensures that the TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth, as stipulated in subsection 269S(1).
Failure to comply with the requirements set forth by the Customs Act 1901 can lead to various consequences. While the Act does not explicitly state penalties for non-compliance, breaches of its provisions could potentially lead to legal actions, including civil or criminal penalties. The exact nature and severity of these penalties would be determined by the courts, depending on the specific circumstances of the breach. It is important for all parties involved to thoroughly understand and comply with the Act's requirements to avoid any legal repercussions.