EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908030
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.
Bitzer Australia applied for a TCO in respect of certain air cooled condensing units on 10 March 2009.
Instrument
TCO No 0908030 was made on 29 May 2009. It declares that those certain air cooled condensing units 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. 0908030 is taken to have come into force on 10 March 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, as amended, provides a framework for the imposition of customs duties on imported goods, and includes provisions for tariff concession orders (TCOs) to provide relief from customs duty for certain goods. The Tariff Concession Instrument No. 0908030, enacted in 2009, is an instrument made under the Customs Act 1901 to address the specific needs of importers by providing tariff concessions for certain air cooled condensing units. This instrument was introduced to facilitate the import of these goods by Bitzer Australia, and it was made by the Chief Executive Officer of Customs, who is the enacting body responsible for determining tariff concessions. The policy objective of this instrument is to provide tariff relief for goods that are not produced in Australia and for which no substitutable goods are available, thereby supporting the importation and use of these specific goods without the burden of customs duty.
Scope and Application
The Customs Act 1901, as part of its broader framework, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This mechanism is available to any person who can demonstrate that the goods in question are not substitutable by any goods produced in Australia and are not listed in the prohibited goods under section 269SJ of the Act. The application process involves a thorough evaluation by the CEO to ensure that the core criteria are met, particularly the absence of substitutable goods produced domestically. The scope of this legislation thus extends to any individual or entity seeking to import goods that qualify under these criteria. The geographic reach of the Act is national, with its application not limited by state or territory boundaries but governed by Commonwealth law. The TCOs are not retrospective, meaning they do not affect rights or impose liabilities for actions taken prior to the order's effective date. The specific TCO No. 0908030, made on 29 May 2009, pertains to certain air-cooled condensing units, reducing their duty rate from the general 5% to free, subject to the conditions and criteria outlined in the Customs Act and the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901 (the Act), through its Part XVA, establishes a framework whereby the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) (sections 269F and 269C). A TCO allows for a lower rate of customs duty on specified goods, provided the application meets the core criteria set out in section 269C of the Act. Specifically, a TCO can only be issued if, on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Section 269B of the Act defines key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the CEO determines that the application meets the core criteria, they are required by section 269P(3) to issue a written TCO order, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995 (the Tariff).
The obligations imposed by the Act on parties seeking a TCO include ensuring that their application is made in accordance with the provisions of section 269F and that it satisfies the core criteria outlined in section 269C. Additionally, the CEO must follow the procedural requirements under section 269K(1) by publishing a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. The CEO is also required to consider any submissions received in response to the Gazette notice. If no objections are received, the CEO can proceed to issue the TCO.
Failure to comply with the requirements of the Act or the conditions of a TCO can result in various consequences. While the Explanatory Statement does not specify criminal penalties, breaches of the Act or TCOs could potentially lead to civil penalties or legal action. The specific penalties would depend on the nature of the breach and applicable laws. For example, fraudulent applications or misuse of TCO benefits could attract fines or other sanctions under relevant legislation. The Act ensures that the rights of persons other than the Commonwealth are protected, meaning that the issuance of a TCO does not disadvantage non-Commonwealth entities or impose liabilities for actions taken prior to the TCO's effective date. Importers, however, stand to benefit as they can apply for duty refunds on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.