EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928054
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.
Climatech Pty Ltd applied for a TCO in respect of certain absorption chillers on 3 August 2009.
Instrument
TCO No 0928054 was made on 6 November 2009. It declares that those certain absorption 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. 0928054 is taken to have come into force on 3 August 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, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument addresses the need to provide tariff concessions for specific goods, thereby facilitating trade and economic benefits by reducing customs duty rates for certain imported goods. The explanatory statement outlines the process for applying for a TCO, detailing the criteria that must be met and the steps taken by the CEO in processing such applications. Specifically, the Act ensures that a TCO is granted if no substitutable goods are produced in Australia, aiming to protect Australian production while promoting the importation of goods that are not locally manufactured. The issuance of TCO No. 0928054 for certain absorption chillers exemplifies this process, granting a tariff concession that lowers the duty rate from 5% to free, effective from the date of application on 3 August 2009.
Scope and Application
The Tariff Concession Instrument No. 0928054 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, such as absorption chillers, by applying for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. This Act is of Commonwealth jurisdiction and extends its reach to any person or entity that imports goods into Australia and applies for a TCO to benefit from a lower rate of customs duty. The Act applies to goods that are not specified in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a TCO, provided that the goods do not have substitutable Australian-produced alternatives and meet other criteria such as the absence of production in the ordinary course of business in Australia. The application of the Act can be extended or restricted through subordinate instruments, such as regulations, which may further define terms or set out additional conditions for eligibility.
Key Provisions
The key operative sections of this legislation, specifically sections 269C, 269B, and 269P of the Customs Act 1901, provide a framework for the application and assessment of Tariff Concession Orders (TCOs). Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined by sections 269B and 269D, which clarify the meanings of "goods produced in Australia" and "ordinary course of business". If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order (TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as outlined in section 269P(3).
The Act imposes several obligations and requirements on the parties involved. For instance, under section 269F, a person may apply to the CEO for a TCO in respect of goods. The CEO must then determine whether the application meets the core criteria and is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. Furthermore, as per subsection 269K(1), the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. This ensures transparency and allows for public input before a decision is made.
In terms of penalties and consequences for breaches, the legislation does not explicitly state any specific offences, penalties, or consequences within the provided sections. However, it is implied that any misuse or improper application for a TCO could potentially lead to legal ramifications under the broader provisions of the Customs Act 1901. For example, any fraudulent application or misrepresentation of facts could result in criminal charges or civil penalties as outlined in other sections of the Act. While the maximum penalties are not detailed in the provided text, such breaches could attract significant fines and even imprisonment under the general provisions of the Act.