EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516055
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 racks and shelves on 16 November 2005.
Instrument
TCO No 0516055 was made on 30 January 2006. It declares that those certain racks and 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. 0516055 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 was enacted to provide for the collection of customs duty and to regulate the importation and exportation of goods. The Act was introduced to address the need for a comprehensive framework to manage customs duties and related processes in Australia. The Tariff Concession Instrument No. 0516055, enacted in 2006, falls under this legislative umbrella and provides for the concession of customs duty on certain goods through Tariff Concession Orders (TCOs). The instrument aims to facilitate trade by reducing the duty burden on specified goods, thereby enhancing the competitiveness of Australian industries. The policy objective is to ensure that when certain goods are imported and no substitutable goods are produced in Australia, they receive a lower rate of customs duty, ultimately benefiting importers and potentially reducing consumer prices.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), facilitating lower rates of customs duty on specified goods. This Act applies to any person or entity seeking a reduction in customs duty on imported goods by applying for a TCO. The application process requires the CEO to ensure that the goods in question do not substitute any goods produced in Australia in the ordinary course of business, as defined in the Act. The geographical scope of the Act is national, with the CEO having the authority to implement these concessions across Australia. Notably, goods specified in section 269SJ of the Act, which are ineligible for TCOs, are excluded from this scheme. Any broader application or restrictions of the Act are managed through subordinate instruments, ensuring a structured and regulated approach to tariff concessions.
Key Provisions
The Tariff Concession Instrument No. 0516055, made under section 269F of the Customs Act 1901, establishes a tariff concession order (TCO) for certain racks and shelves, effective from the date of the application, 16 November 2005, as per subsection 269S(1) of the Act. This instrument declares that these goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, specifically item 50, which sets the rate of duty at free, whereas the general rate is 5% (sections 269P(3) and 269S(1)). The decision to issue this TCO was made after confirming that no substitutable goods were being produced in Australia on the date of application, satisfying the core criteria outlined in section 269C of the Act.
The Act imposes specific obligations on parties applying for a TCO. Firstly, an application must be submitted to the Chief Executive Officer of Customs (CEO), and the applicant must ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for a TCO. Furthermore, the CEO is mandated to publish a notice in the Gazette as per subsection 269K(1) of the Act, inviting submissions from any interested parties who may oppose the making of the TCO. The CEO, in this case, did not receive any submissions opposing the TCO.
Failure to comply with the provisions of the Customs Act 1901 and the related regulations can lead to various consequences. While the explanatory statement does not detail specific offences or penalties for breach of the TCO, it is important to note that the Act generally imposes penalties for non-compliance with customs regulations. Such penalties can include fines, imprisonment, or both, depending on the severity of the breach. Additionally, the TCO itself does not impose any liabilities on any person, ensuring that it does not disadvantage any individual or entity other than the Commonwealth, as per the provisions in the explanatory statement.