EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136192
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.
Danfoss Australia applied for a TCO in respect of certain thermostatic refrigeration and air conditioning valves on 31 October 2011.
Instrument
TCO No 1136192 was made on 16 January 2012. It declares that those certain thermostatic refrigeration and air conditioning valves 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. 1136192 is taken to have come into force on 31 October 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. 1136192 was enacted in 2012 under the Customs Act 1901 to address the issue of tariff concessions for certain goods that are not produced in Australia. This instrument was established to provide a lower rate of customs duty for goods that are not substituted by locally produced goods, thereby supporting the importation of these specific items and encouraging trade. The instrument was created by the Chief Executive Officer of Customs, following an application by Danfoss Australia for tariff concessions on certain thermostatic refrigeration and air conditioning valves. The Customs Act 1901 provides the legislative framework for these concessions, with the primary objective of ensuring that no substitutable goods are produced in Australia at the time of the application. This initiative aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the Tariff Concession Order came into effect.
Scope and Application
The Tariff Concession Instrument No. 1136192, made under the Customs Act 1901, applies to specific goods identified as certain thermostatic refrigeration and air conditioning valves. It is applicable to the entity that applied for the concession, in this case Danfoss Australia, and to any other importers of these goods. The Act operates within the Commonwealth jurisdiction, impacting the customs duty rates for the specified goods. The instrument does not apply to goods listed in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a Tariff Concession Order. The application process and criteria for concession are detailed in sections 269C, 269B, 269D, 269E, and 269P of the Act, which must be satisfied by the Chief Executive Officer of Customs before a concession is granted. The concession reduces the duty on the specified goods from the general rate of 5% to free, and the instrument came into force on the date the application was lodged, 31 October 2011.
Key Provisions
The Tariff Concession Order No. 1136192 under the Customs Act 1901 (section 269F) was made to provide tariff concessions for certain thermostatic refrigeration and air conditioning valves. According to section 269C of the Act, the Chief Executive Officer of Customs (the CEO) must decide whether an application for a Tariff Concession Order (TCO) meets the core criteria. These criteria are outlined in section 269P(3) of the Act, which stipulates that the CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged. Upon meeting these criteria, the CEO must issue a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this instance, item 50 of Schedule 4 applies to these goods, resulting in a duty rate of free, as opposed to the general rate of 5%.
The Act imposes specific obligations on the parties involved. Firstly, any person may apply for a TCO in respect of goods (section 269F). The CEO must then determine whether the application meets the core criteria (section 269C). If satisfied, the CEO must make a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. The TCO is deemed to have come into force on the day the application was lodged (subsection 269S(1)), which for TCO No. 1136192 was 31 October 2011.
The Act also imposes certain requirements on the entities it governs. For instance, it stipulates that the CEO must ensure the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. Moreover, the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration, ensuring that no person (other than the Commonwealth) is disadvantaged or incurs liabilities for actions taken before the registration date (subsection 269S(2)). Importers of the goods will benefit from this TCO, as they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
Under the Customs Act 1901, breaches of the provisions governing Tariff Concession Orders may result in various consequences. Although the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach, the Act generally provides for fines and imprisonment for contraventions related to customs duties and regulations. The maximum penalties for such offences can be substantial, depending on the nature and severity of the breach. The explanatory statement focuses more on the procedural aspects and the specific application of the TCO, rather than the potential penalties for non-compliance.