EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507653
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.
Waeco Pacific Pty Ltd applied for a TCO in respect of certain Portable Refrigerator and/or Freezer on 21 June 2005.
Instrument
TCO No 0507653 was made on 9 September 2005. It declares that those certain Portable Refrigerator and/or Freezer 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 0%.
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. 0507653 is taken to have come into force on 21 June 2005.
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. 0507653 was enacted in 2005 under the Customs Act 1901, aiming to provide relief to importers by reducing the customs duty on certain goods. This legislative instrument addresses the gap in the tariff system where certain imported goods could face higher duties if comparable products were not produced domestically. The Customs Act 1901 establishes a framework for the Chief Executive Officer of Customs to grant tariff concessions based on specific criteria. The instrument was introduced to ensure that the duty on portable refrigerators and freezers was set at a lower rate of 0%, provided no substitutable goods were produced in Australia, thereby facilitating trade and reducing costs for importers. This initiative was undertaken by the Australian Government, with the policy objective of supporting the importation of goods that do not have domestic alternatives, thus encouraging competition and consumer choice in the market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. This applies to any person who can demonstrate that the goods they wish to import are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in section 269C of the Act. The instrument in question, Tariff Concession Instrument No. 0507653, pertains to certain Portable Refrigerators and/or Freezers, where the application by Waeco Pacific Pty Ltd was approved, resulting in a zero percent duty rate for these goods as opposed to the general rate of five percent. The instrument came into effect on the date the application was lodged, 21 June 2005, without affecting any pre-existing rights or imposing liabilities on anyone other than the Commonwealth. The CEO was required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, though none were received in response to the notice. The scope of this legislation is limited to the Commonwealth jurisdiction, and the application process is subject to the core criteria and exclusions as specified in the Act and its related schedules.
Key Provisions
The Tariff Concession Instrument No. 0507653, made under the Customs Act 1901, pertains to the application of tariff concessions for certain Portable Refrigerator and/or Freezer goods. Under section 269F, an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, the CEO is required to make a written order, which constitutes a TCO. Section 269P(3) further stipulates that the TCO must specify a prescribed item of Schedule 4 to the Customs Tariff Act 1995, in this case, item 50, which applies to the Portable Refrigerator and/or Freezer goods.
The obligations imposed by the Act on the parties involve ensuring that the application for a TCO is valid and meets the criteria specified in section 269C. Specifically, the applicant must demonstrate that no substitutable goods were produced in Australia at the time the application was lodged. Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have objections to the making of the TCO. The CEO must consider any such submissions before deciding whether to make the TCO.
In terms of consequences for breaches, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the provisions of the TCO. However, general provisions of the Act may apply where there is non-compliance with the requirements or where there is an attempt to circumvent the tariff concessions granted by a TCO. Any such breaches may lead to legal actions under the broader framework of the Customs Act 1901, which could result in penalties as prescribed by the Act.
It is also important to note that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration in a manner that would disadvantage that person or impose liabilities for actions taken before the registration date. Importers of the affected goods can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. This provision ensures that the rights of importers are beneficially affected by the TCO, without imposing any liabilities on them.