EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514731
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.
Unilever Australasia Pty Ltd applied for a TCO in respect of certain Display Chest Freezers on 19 October 2005.
Instrument
TCO No 0514731 was made on 9 January 2006. It declares that those certain Display Chest Freezers 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. 0514731 is taken to have come into force on 19 October 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 Customs Act 1901 was enacted by the Parliament of Australia to provide a framework for the administration of customs duties, including the establishment of procedures for tariff concession orders. The Act aims to facilitate trade by allowing for reduced customs duty rates on certain imported goods under specific conditions, thereby encouraging economic efficiency and international trade. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act addresses the need to provide temporary tariff relief to importers of goods that are not produced domestically, thereby preventing domestic industries from being unfairly disadvantaged and supporting competitive market dynamics. The policy objective of the Act, as reflected in the creation of TCOs, is to allow for more flexible and responsive customs duty rates that can adapt to changes in the domestic and international economic environment.
Scope and Application
The Customs Act 1901 applies to all individuals, companies, and entities importing goods into Australia, as well as to the conduct and transactions involved in such imports. Specifically, Tariff Concession Orders (TCOs) under Part XVA of the Act apply to applications made by entities seeking a lower rate of customs duty on certain goods. The scope of the Act extends nationally, applying across all states and territories of Australia. The Act provides a mechanism through which the Chief Executive Officer of Customs can grant tariff concessions, reducing the duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The application of the Act can be extended or modified through subordinate instruments, allowing for the detailed regulation of tariff concessions. There are exclusions within the Act, notably those goods specified in section 269SJ, which cannot be subject to a TCO. The explanatory statement for Instrument TCO No. 0514731 details a specific application concerning Display Chest Freezers, where the CEO determined a zero percent duty rate applied following Unilever Australasia Pty Ltd's application, effective from the date the application was lodged.
Key Provisions
The key sections of the Customs Act 1901 relevant to this Tariff Concession Order (TCO) are sections 269C, 269F, 269S, 269P, and 269K. Section 269F allows a person to apply for a TCO in respect of goods, while section 269C outlines the core criteria that the Chief Executive Officer of Customs (CEO) must consider when deciding whether to grant the application. Specifically, if no substitutable goods are produced in Australia on the day the application is lodged, the core criteria are met (section 269C). If the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269P). Additionally, section 269K requires the CEO to publish a notice in the Gazette inviting submissions on the application, although no submissions were received for this TCO.
The Act imposes several obligations on the parties involved. The applicant must ensure their application for a TCO is valid and meets the core criteria as outlined in section 269C. The CEO has the duty to evaluate the application against these criteria and make a decision based on the evidence provided. Furthermore, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on the application, although no submissions were received for this TCO. Importers of the goods subject to the TCO may apply for a refund of duty on goods imported since the TCO is taken to have come into force, under the Customs (Prohibited Imports) Regulations 1956.
Under the Customs Act 1901, there are no specific offences, penalties, or consequences for breach detailed in this context. However, the legislation ensures that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. This protects individuals and entities from any disadvantage or liability arising from the TCO.