EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516054
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 oven and/or griller racks and/or shelves on 16 November 2005.
Instrument
TCO No 0516054 was made on 01 February 2006. It declares that those certain oven and/or griller racks and/or shelves 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. 0516054 is taken to have come into force on 16 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for imposing and collecting customs duties. One aspect of this framework is the ability to grant tariff concessions through Tariff Concession Orders (TCOs) to reduce the duty on specific goods. This is particularly beneficial for businesses that rely on importing goods that are not produced domestically, thereby encouraging trade and potentially lowering costs for consumers. The Tariff Concession Instrument No. 0516054, issued on 1 February 2006, is an example of such a concession, providing a zero-rate duty for certain oven and/or griller racks and/or shelves, effective from the date the application was lodged on 16 November 2005. This instrument aims to ensure that businesses importing these goods are not disadvantaged by customs duties, aligning with the policy objective of fostering economic efficiency and fair trade practices.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities seeking to import goods that are not currently produced in Australia and for which a lower customs duty rate can be negotiated. The application process requires the applicant to demonstrate that no substitutable goods are produced domestically, meeting the core criteria specified in sections 269C and 269SJ of the Act. Once the CEO is satisfied with the application, a TCO is issued, resulting in a tariff concession for the specified goods. This process benefits importers by potentially reducing their duty liabilities for the goods subject to the TCO. The scope of the legislation is national, with its application extending across the Commonwealth of Australia. Importantly, the TCO does not adversely affect any person's rights as of the date of registration and does not impose any new liabilities on individuals or entities.
Key Provisions
The Tariff Concession Instrument No. 0516054, under the Customs Act 1901, primarily concerns the application of a Tariff Concession Order (TCO) for certain oven and/or griller racks and/or shelves. According to section 269F, an application can be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, outlined in section 269C, they must make a written order, known as a TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a reduced rate of customs duty (sections 269P(3) and 269S(1)).
The Act imposes specific obligations on the CEO when considering a TCO application. Firstly, the CEO must ensure the application is not for goods specified in section 269SJ, which are ineligible for a TCO. Secondly, the CEO must verify that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If these conditions are met, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). The CEO must then make a decision based on the application and any submissions received. In this case, no submissions were received, and the CEO proceeded to issue the TCO.
Failure to comply with the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. While the explanatory statement does not specify the exact penalties, breaches of customs regulations generally carry significant fines and potential imprisonment. The exact penalties would depend on the specific breach and the severity of the violation. However, the Act ensures that the TCO does not affect the rights of any person, except the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered (subsection 269S(1)).
Under the TCO, importers of the specified goods will benefit from a refund of duty on goods imported since the day the TCO was taken to have come into force. This is provided under paragraph 126(1)(r) of the Regulations. The TCO also ensures that it does not impose any liabilities on any person for actions taken prior to its registration. This protects importers and other stakeholders from any retrospective liabilities as a result of the TCO.