EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1019062
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.
Hamon Australia Pty Ltd applied for a TCO in respect of certain cooling tower sheets on 27 April 2010.
Instrument
TCO No 1019062 was made on 09 July 2010. It declares that those certain cooling tower sheets 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. 1019062 is taken to have come into force on 27 April 2010.
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. 1019062, enacted in 2010 under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods, in this case, certain cooling tower sheets, by reducing or eliminating customs duty on these goods. The instrument was introduced to provide relief to importers of these sheets by applying a lower rate of duty, or in some cases, a free rate, thereby promoting the importation of these goods. This initiative was established to ensure that Australian importers have access to competitively priced goods, thus supporting industries that rely on these components. The instrument was made by the Chief Executive Officer of Customs and is intended to benefit the rights of importers, facilitating their ability to apply for refunds on duties paid before the concession took effect.
The process of enacting this instrument involved an application by Hamon Australia Pty Ltd to the CEO, who assessed the application against the criteria set out in the Customs Act 1901. Upon finding that no substitutable goods were produced in Australia, the CEO issued Tariff Concession Order No. 1019062, which specifies that the cooling tower sheets are subject to a free rate of duty, rather than the general rate of 5%. The order was published in the Gazette, inviting any interested parties to submit objections, though none were received. The concession is effective from the date of the application, 27 April 2010, and does not impose any liabilities on persons other than the Commonwealth, thereby safeguarding the interests of importers and ensuring compliance with the Act.
Scope and Application
The Tariff Concession Instrument No. 1019062 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, in this case, cooling tower sheets. The scope of the Act involves the application process overseen by the Chief Executive Officer of Customs, who must determine if the application meets the criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The application process requires the CEO to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in this instance. The geographical reach of this legislation is national, as it pertains to the customs duties and concessions across Australia. The application is exempt for those goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The commencement of the TCO is effective from the date the application was lodged, in this case, 27 April 2010, and it does not impose any liabilities on any person, nor does it affect the rights of any person as at the date of registration with respect to actions taken before the registration date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1019062 are sections 269C, 269P(3), and 269S. Section 269C specifies the core criteria that must be met for a Tariff Concession Order (TCO) to be considered, namely that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must issue a TCO. Section 269S determines that the TCO is taken to have come into force on the date the application for the TCO was lodged.
The Act imposes several obligations on the CEO of Customs and on applicants for a TCO. The CEO must ensure that an application meets the core criteria specified in section 269C. If satisfied, the CEO must issue a written TCO as per section 269P(3). Additionally, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. Hamon Australia Pty Ltd, as the applicant, must ensure their application is valid and provides all necessary information to satisfy the CEO of compliance with the core criteria.
Under the Customs Act 1901, there are potential civil and criminal consequences for breaches related to TCOs. Although the explanatory statement does not specify penalties, breaches of the Act generally could lead to fines, imprisonment, or both, depending on the severity of the offence. The specific penalties would be outlined in other sections of the Customs Act or associated regulations. The CEO’s decision-making process must be conducted with due diligence to avoid any legal repercussions from incorrectly granting or withholding a TCO.