EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922134
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.
Moffat Pty Ltd applied for a TCO in respect of certain water chillers on 29 June 2009.
Instrument
TCO No 0922134 was made on 18 September 2009. It declares that those certain water chillers 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. 0922134 is taken to have come into force on 29 June 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, enacted by the Parliament of Australia, provides a framework for the administration of customs duties and the regulation of imports and exports. The Act includes provisions for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at granting tariff concessions to specific goods under certain conditions. This was introduced to address the need for flexibility in customs duty applications, particularly for goods that are not produced domestically or for which a domestic alternative does not exist. The Explanatory Statement for Tariff Concession Instrument No. 0922134 outlines the process followed for granting a concession to Moffat Pty Ltd for certain water chillers, reflecting the policy objective of facilitating trade by reducing customs duty rates where appropriate. The instrument was made without any submissions against it, indicating a straightforward application process and the absence of any public opposition to the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0922134, made under the Customs Act 1901, applies to goods specified in the instrument, in this case certain water chillers, and provides for a tariff concession order (TCO) that reduces the customs duty on these goods to zero. The Act enables the Chief Executive Officer of Customs to make such orders if they are satisfied that the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia. The TCO applies from the date the application was lodged, 29 June 2009, and benefits importers by potentially allowing them to apply for a refund of duty on goods imported since that date. This instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The application of this TCO is limited geographically to Australia and is subject to the terms and conditions set out in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for Tariff Concession Orders (TCOs) under section 269F, which are applications made by individuals or entities to the Chief Executive Officer (CEO) of Customs for a lower rate of customs duty on specific goods. If the CEO is satisfied that the application does not pertain to goods excluded under section 269SJ and meets the core criteria specified in section 269C, a TCO may be issued. Section 269C stipulates that a TCO application meets the core criteria if, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for these terms are provided in sections 269D (goods produced in Australia), 269E (ordinary course of business), and 269F (substitutable goods). If the CEO is satisfied that the application meets these criteria, they must issue a written TCO under section 269P(3), specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties include the requirement for the CEO to make a TCO if the application meets the core criteria, and for applicants to ensure that their applications are valid and comply with the specified conditions. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in section 269K(1). This ensures that the process is transparent and allows for potential objections to be raised. The TCO, once issued, is deemed to have come into force on the day the application was lodged, as outlined in subsection 269S(1). It is important to note that the TCO does not affect the rights of any person, other than the Commonwealth, in respect of anything done or omitted before the date of registration.
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences, penalties, or consequences for breaches. However, failure to meet the criteria for a TCO or providing incorrect information in an application could result in the CEO denying the application. Additionally, any misuse or fraudulent claims related to the TCO could potentially lead to legal action or penalties under other relevant laws. The primary consequences are administrative, focusing on ensuring the integrity and proper application of the TCO scheme.