EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938988
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.
Heldon Products applied for a TCO in respect of certain refrigeration reciever tanks on 16 October 2009.
Instrument
TCO No 0938988 was made on 04 January 2010. It declares that those certain refrigeration reciever 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. 0938988 is taken to have come into force on 16 October 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 regulation of imports and exports, including the imposition of customs duties. One of the mechanisms within this framework is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duties on certain goods. The Tariff Concession Instrument No. 0938988 was introduced to address the specific need for tariff concessions on certain refrigeration receiver tanks. This instrument was made under the authority granted by Part XVA of the Customs Act 1901, which empowers the Chief Executive Officer of Customs to make TCOs if certain criteria are met. The policy objective of this instrument is to ensure that such goods are subject to a lower rate of customs duty, in this case, free of duty, provided that no substitutable goods are produced in Australia. The instrument came into force on the date the application was lodged, 16 October 2009, and does not impose any liabilities on persons other than the Commonwealth, potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0938988 under the Customs Act 1901 applies to any individual or entity seeking tariff concessions for specific goods, namely certain refrigeration receiver tanks in this case, provided that these goods are not specified as ineligible under section 269SJ of the Act. The scope of this legislation is limited to goods that are not substitutable by Australian-produced items, and it pertains to the process by which such concessions can be granted by the Chief Executive Officer of Customs. The instrument itself is a national application, operating under the authority of the Commonwealth and extending to any person or entity importing the specified goods into Australia. The instrument excludes goods that are already produced in Australia in the ordinary course of business and for which a lower customs duty rate would be inappropriate. The application of the Tariff Concession Order can be further defined or refined through subordinate instruments, such as regulations or further orders made by the CEO, which can provide more detailed guidance on eligibility and administration of tariff concessions.
Key Provisions
The Customs Act 1901 (the Act), particularly under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO). An applicant may request a TCO for specific goods (s 269F). If the CEO determines that the application is not for goods specified in section 269SJ and that the application meets the core criteria as outlined in section 269C, the CEO is obligated to issue a written TCO (s 269P(3)). A TCO, once issued, declares that the specified goods will be subject to a reduced rate of customs duty as outlined in the Tariff (Schedule 4 of the Customs Tariff Act 1995). For example, TCO No. 0938988 applies to certain refrigeration receiver tanks, reducing the duty rate from 5% to free.
The Act imposes several obligations on the CEO and applicants. The CEO must ensure that any TCO application not related to goods specified in section 269SJ is assessed against the core criteria (s 269C). This involves verifying that no substitutable goods were produced in Australia at the time of application (s 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO (s 269K(1)). This ensures transparency and allows for any objections to be considered before the TCO is made.
Violations of the provisions set out in the Customs Act 1901, including improper application or issuance of a TCO, could result in various penalties. While the explanatory statement does not detail specific offences or penalties, breaches of the Act could potentially lead to civil or criminal consequences under the broader framework of Australian customs law. These may include fines or imprisonment, depending on the nature and severity of the breach. However, the specific penalties would be determined by the relevant provisions of the Act and other applicable laws.