EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604919
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 applied for a TCO in respect of certain ice maker and/or cold water dispenser parts on 10 March 2006.
Instrument
TCO No 0604919 was made on 2 June 2006. It declares that those certain ice maker and/or cold water dispenser parts 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. 0604919 is taken to have come into force on 10 March 2006.
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. 0604919, enacted in 2006, is an instrument under the Customs Act 1901 designed to address the need for tariff concessions for certain goods imported into Australia. This legislation was enacted by the Australian Parliament to provide relief to specific industries by reducing the customs duty on particular goods, thereby making them more affordable and competitive within the domestic market. The policy objective behind this instrument is to ensure that the application of lower customs duty rates supports industries that may be adversely affected by higher tariffs, without imposing any liabilities or disadvantaging any parties that were established prior to the commencement of the tariff concession. The instrument was effective from the date the application was lodged, which in this case was 10 March 2006, and it applies to certain ice maker and/or cold water dispenser parts, reducing the duty from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0604919, made under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, namely certain ice maker and/or cold water dispenser parts, for which a Tariff Concession Order (TCO) was sought and granted by the Chief Executive Officer of Customs. This instrument reduces the rate of customs duty on these goods from the general rate of 5% to 0%, provided the application for the concession meets the criteria outlined in the Act. Specifically, the CEO must be satisfied that no substitutable goods are produced in Australia in the ordinary course of business, as defined under the Act. The instrument applies across the Commonwealth of Australia, and its application is not limited by state or territory boundaries. It is pertinent to note that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the instrument's effective date. Additionally, the rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force.
Key Provisions
The Tariff Concession Instrument No. 0604919 under the Customs Act 1901 establishes a tariff concession order (TCO) for certain ice maker and/or cold water dispenser parts (section 269F). If the Chief Executive Officer of Customs (CEO) determines that no substitutable goods are produced in Australia and that the application meets the core criteria (section 269C), a TCO may be made (section 269P(3)). The TCO specifies that these goods are subject to a 0% duty rate, as opposed to the general 5% rate (section 269P(3)).
The CEO is required to publish a notice in the Gazette inviting any person to submit objections to the TCO if they believe it should not be made (subsection 269K(1)). In this instance, no submissions were received, allowing the TCO to proceed. The TCO is considered effective from the date the application was lodged (subsection 269S(1)), which in this case is 10 March 2006. Importantly, the TCO does not affect any rights or impose any liabilities on persons (other than the Commonwealth) in relation to actions taken before the TCO’s effective date (subsection 269S(1)).
The obligations under the Act require the CEO to assess the application against the core criteria and decide whether to make a TCO. This involves confirming that no substitutable goods are produced in Australia and publishing a notice in the Gazette for objections. Importers of the specified goods will benefit from the TCO by being able to apply for a refund of duty paid on these goods since the TCO’s effective date (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements set out in the Act could result in legal consequences. However, the explanatory statement does not specify any offences, penalties, or consequences for breach. It is important to note that the legislation does not impose any liabilities on persons (other than the Commonwealth) in relation to actions taken before the TCO’s effective date.