EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904839
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.
Dux Manufacturing applied for a TCO in respect of certain heat pumps fan motors on 12 February 2009.
Instrument
TCO No 0904839 was made on 08 May 2009. It declares that those certain heat pumps fan motors 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. 0904839 is taken to have come into force on 12 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 Tariff Concession Instrument No. 0904839, made under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods that are not produced domestically and thus do not have substitutable alternatives within Australia. Enacted in 2009, this instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs), allowing for a reduced rate of customs duty on certain goods. The enacting body, the Chief Executive Officer of Customs, ensures that the application aligns with the core criteria set out in the Act. The policy objective is to support industries by reducing the cost of importing necessary goods, thus promoting economic efficiency and competitiveness. The process involves thorough consultation with relevant stakeholders, as stipulated by the Act, although in this instance, no objections were received. The TCO benefits importers by potentially allowing them to claim refunds on duties paid prior to the TCO's effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which applies reduced customs duties on certain goods. The Act applies to any person who applies for a TCO in respect of goods, provided that the goods do not fall within the exclusions specified in section 269SJ of the Act. A TCO application is considered valid if it meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must make a TCO if satisfied that the application meets these criteria. The scope of the TCO extends nationally, affecting the importation duties on the specified goods. The rights of importers are positively impacted, as they can apply for a refund of duty on goods imported since the effective date of the TCO, which is the day the application was lodged. The TCO does not disadvantage any person or impose new liabilities on anyone except the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0904839, as explained in the accompanying explanatory statement, are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C provides that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these core criteria, section 269P requires the CEO to make a written order (a TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269SJ lists goods that cannot be subject to a TCO.
The Act imposes several obligations and requirements on the parties it governs. The CEO of Customs must assess whether a TCO application meets the core criteria, as outlined in section 269C. If the application does meet the criteria and is not in respect of goods specified in section 269SJ, the CEO is obligated to make a TCO under section 269P. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. The CEO must also ensure that the TCO does not affect the rights of a person as at the date of registration to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration, as stated in subsection 269S(1).
In terms of offences, penalties, and consequences, the explanatory statement does not specify any criminal offences or penalties associated with breaching the requirements of the Customs Act 1901 or the TCO itself. However, it does mention that the TCO does not impose any liabilities on any person. The Act's provisions are primarily concerned with establishing the conditions under which a TCO can be applied for and granted, rather than penalising breaches. The focus is on ensuring that the process for granting TCOs is transparent and fair, allowing for public submissions and protecting the rights of importers. The rights of importers will be beneficially affected, particularly under paragraph 126(1)(r) of the Regulations, which allows importers to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force.