EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101017
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.
Simcoa Operations Pty Ltd applied for a TCO in respect of certain furnace transformer oil air cooler on 10 January 2011.
Instrument
TCO No 1101017 was made on 28 March 2011. It declares that those certain furnace transformer oil air cooler 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. 1101017 is taken to have come into force on 10 January 2011.
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. 1101017, enacted in 2011 under the Customs Act 1901, was introduced to provide tariff concessions for specific goods, namely certain furnace transformer oil air coolers, to assist in reducing the cost of these goods for Australian consumers and businesses. The Customs Act 1901, administered by the Australian Parliament, established the framework for Tariff Concession Orders (TCOs), which are intended to lower the customs duty on goods where there are no substitutable goods produced in Australia. By making this concession, the legislation aims to support the efficient operation of businesses that rely on these imported goods. The instrument was made by the Chief Executive Officer of Customs after Simcoa Operations Pty Ltd applied for the tariff concession on 10 January 2011, and no objections were received following the publication of the application in the Gazette. The TCO came into effect on the date of the application, 10 January 2011, providing free duty on the specified goods and allowing for duty refunds for importers of these goods since that date.
Scope and Application
The Tariff Concession Instrument No. 1101017 under the Customs Act 1901 applies to specific goods, namely certain furnace transformer oil air coolers, by providing a concession on customs duty. This instrument is directed at individuals or entities that import these goods into Australia, allowing them to benefit from a reduced or free rate of customs duty as specified in the instrument. The scope of the Act extends to the entire Commonwealth of Australia, with the concession applying uniformly across all states and territories. It is important to note that the Act does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument also stipulates that the tariff concession does not affect any pre-existing rights of individuals or entities, ensuring that the rights of importers are advantageously impacted. The CEO of Customs has the authority to make such orders if certain criteria are met, including the absence of substitutable goods produced in Australia at the time of application.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1101017 (the Instrument) pertain to the making of Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901 (the Act) and the conditions under which these orders can be made, as outlined in sections 269C, 269P, and 269SJ of the Act. Specifically, section 269C requires that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as defined in section 269D, 269E, and 269F of the Act. Once the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets these criteria, section 269P(3) mandates that the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Instrument imposes several obligations on the parties it governs. Firstly, it requires that any person who wishes to apply for a TCO must ensure that their application is made in accordance with section 269F of the Act. This involves meeting the core criteria outlined in section 269C, including demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also act promptly in considering the application and, if satisfied that the core criteria are met, issue a TCO as required by section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, the CEO did not receive any submissions.
Failure to comply with the requirements set out in the Act and the Instrument can lead to various consequences. While the Act does not specify explicit offences or penalties for non-compliance with the TCO process itself, general provisions under the Customs Act 1901 may apply. These could include penalties for providing false or misleading information in an application or for failing to comply with customs regulations. Importers who take advantage of the TCO may be required to ensure they meet the conditions for refunds of duty as per the Regulations, specifically paragraph 126(1)(r). Non-compliance with these refund conditions might result in civil or administrative penalties. The TCO itself does not impose any liabilities on any person, as specified under section 269S of the Act.