EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923307
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.
Grundfos Pumps Pty Ltd applied for a TCO in respect of certain cold water tanks on 06 July 2009.
Instrument
TCO No 0923307 was made on 21 September 2009. It declares that those certain cold water tanks 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. 0923307 is taken to have come into force on 06 July 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. 0923307, enacted under the Customs Act 1901, addresses the issue of tariff concessions for specific goods that are not produced in Australia, thereby ensuring fair trade practices and promoting economic efficiency. This instrument was developed in response to an application by Grundfos Pumps Pty Ltd for tariff concessions on certain cold water tanks, which was lodged on 6 July 2009. The Chief Executive Officer of Customs assessed the application and determined that no substitutable goods were produced in Australia, thus satisfying the core criteria under section 269C of the Act. Following this assessment, the CEO issued Tariff Concession Order (TCO) No. 0923307 on 21 September 2009, which declared that the specified cold water tanks would be subject to a zero rate of customs duty, as opposed to the general rate of 5%. The policy objective of this legislation is to streamline the importation process for goods that are not domestically produced, thereby benefiting importers and potentially lowering costs for consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides for Tariff Concession Orders (TCOs) that can be applied for by any person seeking a lower rate of customs duty on goods. This Act applies to any goods that are not specified as ineligible in section 269SJ and must meet the core criteria outlined in sections 269C, 269D, 269E, and 269F. The process involves an application to the Chief Executive Officer of Customs (CEO), who assesses whether the goods are not substitutable by any goods produced in Australia in the ordinary course of business. Once a TCO is granted, the specified goods attract a lower rate of customs duty as outlined in Schedule 4 to the Customs Tariff Act 1995. The application process includes a requirement for the CEO to publish a notice in the Gazette inviting any interested parties to lodge submissions, although in the case of TCO No 0923307, no submissions were received. The TCO, effective from the date of application, does not disadvantage any person or impose any liabilities for actions taken prior to its registration. It is noteworthy that the TCO does not extend to goods specified in section 269SJ and only applies to the specific goods mentioned in the order.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0923307, under the Customs Act 1901, pertain to the application and assessment process for Tariff Concession Orders (TCOs). Section 269F enables an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then assess the application against the core criteria set out in sections 269C and 269P(3). If the application meets these criteria, a TCO will be issued, as evidenced in the instrument (section 269P(3)). The instrument itself, TCO No. 0923307, specifies that certain cold water tanks are subject to the TCO and will therefore attract a duty rate of free instead of the general rate of 5% (Schedule 4, item 50).
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must ensure that the application is valid and not for goods specified in section 269SJ of the Act that cannot be subject to a TCO. The CEO must also assess whether the application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties on the proposed TCO, although no submissions were received for TCO No. 0923307 (subsection 269K(1)). Once a TCO is made, it comes into force on the day the application was lodged (subsection 269S(1)).
The Customs Act 1901 does not explicitly detail specific offences, penalties, or consequences for breaches of the TCO provisions in the explanatory statement provided. However, it is understood that the Act generally imposes legal consequences for non-compliance with its provisions, including potential civil or criminal penalties. The absence of specific penalties within this explanatory statement suggests that any breaches would be subject to the broader legal framework of the Customs Act 1901, which might include fines, imprisonment, or other legal actions as determined by the relevant courts.
In the case of TCO No. 0923307, the instrument specifies that it does not affect the rights of persons other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted before the date of registration (subsection 269S(1)). The rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).