EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927025
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.
Applied Investments applied for a TCO in respect of certain dehumidifiers on 28 July 2009.
Instrument
TCO No 0927025 was made on 09 October 2009. It declares that those certain dehumidifiers 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. 0927025 is taken to have come into force on 28 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for managing customs duties and includes provisions for Tariff Concession Orders (TCOs) that allow for the reduction or exemption of customs duty on certain imported goods. These concessions are intended to promote economic efficiency and competitiveness by reducing the cost of imported goods that do not have locally produced alternatives. This particular legislation, represented by the Tariff Concession Instrument No. 0927025, was introduced to address the specific need for tariff concessions on certain dehumidifiers, as requested by Applied Investments. The Instrument was made on 09 October 2009, declaring that the specified dehumidifiers are subject to a duty rate of free, down from the general rate of 5%, effective from 28 July 2009, the date the application was lodged. This instrument aims to ensure that the rights of importers are not adversely affected by the concession, and they may benefit from duty refunds for imports made since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0927025, made under the Customs Act 1901, applies to certain dehumidifiers for which a Tariff Concession Order (TCO) was requested by Applied Investments. The Act enables the Chief Executive Officer of Customs to grant a TCO, thereby lowering the customs duty on specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument applies to the goods specified in the TCO, and its primary effect is to reduce the duty from the general rate of 5% to free for these goods. The scope of the legislation is limited to the goods specified in the TCO and does not extend to any other goods or entities not covered by the order. The application of the Act is national, as it operates under the Commonwealth’s authority and affects imports into Australia. The TCO does not impose any liabilities on any person and does not disadvantage any person, except for the Commonwealth, in relation to actions taken before the order’s effective date. The Act’s application can be extended or clarified through subordinate instruments, such as regulations that may further define terms or specify additional conditions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for making Tariff Concession Orders (TCOs) (s 269C, s 269F, s 269SJ). A TCO is an order made by the Chief Executive Officer of Customs (the CEO) which reduces the customs duty on certain goods. For an applicant to be eligible for a TCO, the goods in question must not be specified in section 269SJ, which lists goods ineligible for TCOs. The core criteria for approving a TCO application is defined in section 269C: the goods must not have substitutable goods produced in Australia on the date the application was lodged. The meanings of "substitutable goods," "goods produced in Australia," and "ordinary course of business" are further clarified in sections 269D, 269E, and the definition of substitutable goods in respect of TCO applications.
Under the Customs Act 1901, the CEO has specific obligations when processing a TCO application. If the application is not disqualified under section 269SJ, the CEO must determine if it meets the core criteria outlined in section 269C. If satisfied, the CEO must issue a written TCO, as stipulated in subsection 269P(3). Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons against the TCO being granted. In the case of TCO No. 0927025, the CEO did not receive any submissions opposing the order.
Section 269S(1) of the Customs Act 1901 specifies that a TCO is effective from the date the application was lodged. In the case of TCO No. 0927025, this date is 28 July 2009. The Act ensures that the TCO does not retroactively affect the rights of any person, except the Commonwealth, to their disadvantage or impose any liabilities for actions taken before the TCO's effective date. Importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any liabilities on any person.
Breaches of the provisions in the Customs Act 1901, including those related to TCOs, can result in various consequences. Offences under the Act can lead to both criminal and civil penalties, with the specific penalties depending on the nature and severity of the offence. For instance, knowingly making a false statement in an application for a TCO could result in fines or imprisonment. The maximum penalties for different offences are set out in other sections of the Customs Act 1901 and the Crimes Act 1914, but specific details are not provided in the explanatory statement for TCO No. 0927025.