EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021328
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.
Sanden International Pty Ltd applied for a TCO in respect of certain heat pumps on 11 May 2010.
Instrument
TCO No 1021328 was made on 19 July 2010. It declares that those certain heat pumps 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. 1021328 is taken to have come into force on 11 May 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 Customs Act 1901 was enacted by the Parliament of Australia to establish a comprehensive framework for the administration of customs duties, including the ability to grant tariff concessions. One of the instruments under this Act is the Tariff Concession Instrument No. 1021328, introduced to address the specific need for tariff concessions on certain goods. This instrument was enacted to provide a mechanism by which the Chief Executive Officer of Customs could apply lower customs duties on particular goods, provided that no substitutable goods were produced in Australia. The policy objective of this instrument is to facilitate trade by reducing the duty on specified goods, thereby making them more competitive in the market. This particular tariff concession was applied to certain heat pumps, where the general duty rate was reduced to free, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1021328 under the Customs Act 1901 applies to the specific category of goods, namely certain heat pumps, for which Sanden International Pty Ltd applied for a Tariff Concession Order (TCO). The Act allows for the CEO of Customs to grant lower customs duty rates on goods specified in a TCO if the core criteria are met, including the absence of substitutable goods being produced in Australia. The TCO, once made, applies to the goods it specifies and provides tariff concessions from the date the TCO application was lodged. The geographic and jurisdictional reach of this legislation is national, as it operates under the Commonwealth's authority in the administration of customs duties. The legislation does not specify any exclusions or exemptions other than those goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The application of the TCO is further defined and potentially extended through subordinate instruments such as regulations, but in this case, no such instruments are mentioned as affecting the TCO No. 1021328 directly.
Key Provisions
The primary sections of this legislation, specifically 269C, 269B, 269D, 269E, 269P(3), and 269K(1) of the Customs Act 1901, outline the process and criteria for establishing a Tariff Concession Order (TCO). Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO is convinced that the application pertains to goods not excluded by section 269SJ, they must then determine if the application meets the core criteria, as outlined in section 269C. This assessment involves ensuring that, on the application date, no substitutable goods were produced in Australia in the ordinary course of business, with definitions provided in sections 269B, 269D, and 269E. If the CEO confirms that the application meets these criteria, they must issue a written TCO order, as per section 269P(3), which specifies the goods to which a particular item of Schedule 4 of the Customs Tariff Act 1995 applies. For instance, in the case of Sanden International Pty Ltd's application for certain heat pumps, the CEO issued TCO No. 1021328, which took effect on 11 May 2010, the date the application was lodged.
The Act imposes specific obligations and requirements on the CEO of Customs and the applicants for TCOs. The CEO must thoroughly review each application to ensure it complies with the core criteria specified in section 269C. This includes verifying that no substitutable goods were produced in Australia on the application date, adhering to the definitions provided in sections 269B, 269D, and 269E. Upon confirmation, the CEO must issue a TCO and publish a notice in the Gazette, inviting any interested parties to submit objections, as mandated by section 269K(1). This process ensures transparency and fairness in the TCO application process. Additionally, the CEO must ensure that the rights of non-Commonwealth persons are not adversely affected by the TCO, as stipulated in subsection 269S(1).
The Act delineates potential consequences for non-compliance or misuse of the TCO provisions. However, the explanatory statement does not explicitly mention specific offences, penalties, or civil/criminal consequences for breaches of the Act. Nevertheless, it is essential for applicants and the CEO to adhere strictly to the outlined procedures to avoid any legal ramifications. Non-compliance could potentially lead to legal disputes or administrative penalties, although the exact nature of these penalties is not detailed in the provided text. The Act’s focus on ensuring that no person (other than the Commonwealth) is disadvantaged or imposed liabilities upon before the TCO registration date underscores the importance of meticulous compliance with its provisions.