EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947866
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.
Soler and Palau applied for a TCO in respect of certain low profile axial fans on 8 December 2009.
Instrument
TCO No 0947866 was made on 26 February 2010. It declares that those certain low profile axial fans 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. 0947866 is taken to have come into force on 8 December 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. 0947866 was enacted under the Customs Act 1901 to address the issue of tariff concessions for specific goods that are not produced in Australia. The instrument was introduced to provide relief to importers of low profile axial fans, which were subject to a 5% duty rate under the general tariff. The instrument was made on 26 February 2010 by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia at the time the application was lodged. The policy objective of the instrument is to promote the importation of goods that are not produced domestically, thereby benefiting importers and potentially encouraging competition in the market. The instrument does not impose any liabilities on any person and provides a refund of duty for importers of the specified goods.
The instrument was made following an application by Soler and Palau for a tariff concession on certain low profile axial fans on 8 December 2009. The CEO published a notice in the Gazette inviting any person who considered that there were reasons why the TCO should not be made to lodge a submission with the CEO. No submissions were received in response to this invitation. The instrument is taken to have come into force on 8 December 2009, the day on which the application for the TCO was lodged. The rights of importers will be beneficially affected, and 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.
Scope and Application
The Tariff Concession Instrument No. 0947866 under the Customs Act 1901 applies to specific goods, namely certain low profile axial fans, as determined by the Chief Executive Officer of Customs. This legislation is designed to provide tariff concessions for goods not produced in Australia, thereby encouraging their importation by offering a lower rate of customs duty. The application of this instrument is contingent upon the CEO's satisfaction that the goods in question are not substitutable by any products manufactured domestically and that they meet the core criteria outlined in the Act. The scope of this instrument is national, as it operates under the authority of the Commonwealth. The instrument does not impose any liabilities or disadvantage any person other than the Commonwealth and can be applied retroactively for duty refunds by importers of the specified goods since the date the application for the tariff concession was lodged. The instrument does not explicitly exclude any specific groups or industries, but it does not apply to goods that are specified as ineligible under section 269SJ of the Customs Act 1901.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework, detailed in Part XVA, through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO). Section 269F of the Act allows a person to apply to the CEO for a TCO in respect of certain goods, provided the goods are not specified in section 269SJ, which outlines the goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, a TCO will be made. These core criteria are defined in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties it governs are significant. For instance, under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. Additionally, under section 269S(1), a TCO is taken to have come into force on the day on which the application for the TCO was lodged. The TCO in question, No. 0947866, was made on 26 February 2010, and it is taken to have come into force on 8 December 2009, the date on which the application was lodged.
The Tariff Concession Order No. 0947866, concerning certain low profile axial fans, imposes no liabilities on any person and does not affect the rights of a person as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration. However, it does beneficially affect the rights of importers, who may apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.
Breach of the provisions of the Act or the terms of a TCO could lead to civil or criminal consequences, though specific offences, penalties, or consequences are not detailed in the explanatory statement. Given the nature of the Act and the potential impact of TCOs on duty rates and importer rights, non-compliance could result in significant penalties. The maximum penalties for breaches of the Customs Act are not explicitly stated in this explanatory statement, but they can include fines and imprisonment, depending on the severity of the breach.