EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516029
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.
Electrolux Home Products Pty Ltd applied for a TCO in respect of certain drain pumps on 15 November 2005.
Instrument
TCO No 0516029 was made on 30 January 2006. It declares that those certain drain 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. 0516029 is taken to have come into force on 15 November 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. 0516029, enacted under the Customs Act 1901, was introduced to address the issue of providing tariff concessions for specific goods that are not produced in Australia and thus would not be in competition with domestic production. This instrument enables the Chief Executive Officer of Customs to lower the customs duty on certain imported goods, provided that no substitutable goods are produced domestically. By doing so, it aims to support the import of essential goods that are not manufactured within Australia, thereby potentially benefiting consumers and importers. The Tariff Concession Order (TCO) was made on 30 January 2006, applying to certain drain pumps, for which the duty rate was reduced from the general rate of 5% to free, effective from 15 November 2005. The enactment and implementation of this TCO exemplify the policy objective of facilitating the importation of goods that are not domestically produced, thereby supporting market access and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0516029, issued under the Customs Act 1901, pertains to the application of a Tariff Concession Order (TCO) for certain drain pumps, submitted by Electrolux Home Products Pty Ltd. The Act applies to any person or entity seeking to import goods that may be subject to a TCO, with the specific aim of reducing the customs duty for these goods. The instrument is effective as of the date the application was lodged, in this case, 15 November 2005. The geographic reach of this Act is national, as it falls under the Commonwealth jurisdiction, and applies to all importers within Australia. The application process involves the Chief Executive Officer of Customs determining whether the goods in question meet the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. Exclusions under section 269SJ of the Act prevent certain goods from being subject to a TCO. Once the CEO is satisfied that the application meets the core criteria, they must issue a written TCO, as was done in this instance, declaring that the specified goods are subject to a reduced rate of duty. The rights of the Commonwealth and other persons are protected under the Act, ensuring no disadvantages or liabilities are imposed retroactively from the date of registration.
Key Provisions
The Tariff Concession Order (TCO) No. 0516029, made under section 269F of the Customs Act 1901, applies a zero rate of duty to certain drain pumps, which otherwise carry a general duty rate of 5% (section 269P(3)). This concession was granted following an application by Electrolux Home Products Pty Ltd, and the order came into force on 15 November 2005, the date the application was lodged (subsection 269S(1)). The concession applies to goods that are not substitutable by any goods produced in Australia in the ordinary course of business (section 269C). These specific drain pumps are covered by item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on parties involved with the TCO process. The Chief Executive Officer of Customs (CEO) must ensure that an application for a TCO is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application is valid, the CEO must then determine whether it meets the core criteria outlined in section 269C. In this case, the CEO determined that the application for the drain pumps met these criteria, as no substitutable goods were produced in Australia at the time. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. In this instance, no objections were received (subsection 269K(1)).
Under the Customs Act 1901, there are no explicit offences or penalties specified for breaching the provisions related to TCOs. However, any misuse of the concession or failure to comply with the terms of the TCO could potentially lead to civil or criminal consequences under other relevant sections of the Customs Act or related legislation. The specific penalties would depend on the nature of the breach, but they could include fines or other sanctions as provided by law for breaches of customs regulations. The maximum penalties for such breaches can vary significantly depending on the severity and intent of the violation.