EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911882
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.
Rittal Pty Ltd applied for a TCO in respect of certain wall mounted cooling units on 08 April 2009.
Instrument
TCO No 0911882 was made on 29 June 2009. It declares that those certain wall mounted cooling 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. 0911882 is taken to have come into force on 08 April 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. 0911882, enacted under the Customs Act 1901, was introduced to address the specific needs of importers by providing tariff concessions for certain goods, thereby facilitating more competitive pricing and potentially stimulating demand. The Customs Act 1901, administered by the Australian Parliament, establishes a framework under which the Chief Executive Officer of Customs can grant tariff concessions through Tariff Concession Orders. These orders apply a lower rate of customs duty to goods specified in the order, provided the core criteria are met, notably that no substitutable goods are produced in Australia. The policy objective of this legislation is to assist Australian businesses and consumers by reducing the cost of imported goods, thereby enhancing economic efficiency and consumer welfare. The Tariff Concession Instrument No. 0911882, which became effective from 8 April 2009, was made in response to an application by Rittal Pty Ltd for tariff concessions on certain wall-mounted cooling units, with the resulting duty rate set at zero.
Scope and Application
The Tariff Concession Instrument No. 0911882 under the Customs Act 1901 applies specifically to the goods subject of the application, in this case certain wall mounted cooling units. This legislation is applicable to entities and individuals involved in the importation of these goods, particularly importers who will benefit from the tariff concession by potentially being able to apply for a refund of duty on goods imported since the date the Tariff Concession Order (TCO) came into force. The instrument extends to the national jurisdiction of Australia, aligning with the Customs Act 1901 which is a Commonwealth Act. The TCO does not apply to goods specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. Additionally, the application of the TCO is restricted by the core criteria outlined in section 269C, which mandates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The scope of the TCO can be further refined or expanded through subordinate instruments as deemed necessary by the Chief Executive Officer of Customs.
Key Provisions
The main operative sections of this legislation focus on the process and criteria for granting Tariff Concession Orders (TCO) under the Customs Act 1901. Specifically, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided these goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for key terms such as "substitutable goods" and "ordinary course of business" are provided in sections 269D and 269E, respectively. If the CEO determines that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, thereby applying a lower rate of duty.
The obligations imposed by this legislation primarily concern the CEO of Customs. The CEO must ensure that any TCO application is reviewed to determine whether it meets the core criteria set out in section 269C. This involves verifying that no substitutable goods were produced in Australia on the date of application. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit objections or reasons why the TCO should not be granted. The CEO must also consider any submissions received and decide whether to proceed with the TCO based on the evidence and criteria.
Offences and penalties under this legislation are not explicitly detailed within the text. However, the potential consequences for non-compliance could include the failure to meet the established criteria for a TCO, resulting in the application being denied. Importers who attempt to take advantage of a TCO without meeting the specified conditions might face scrutiny and potential legal actions for misrepresentation or fraud. Although specific penalties are not outlined in the provided text, breaches of customs regulations generally carry significant financial penalties and may involve legal action to enforce compliance with the Act.