EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606439
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 gas cooker trivets on 10 April 2006.
Instrument
TCO No 0606439 was made on 30 June 2006. It declares that those certain gas cooker trivets 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. 0606439 is taken to have come into force on 10 April 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. 0606439 was enacted under the Customs Act 1901 to address the need for concessional tariff rates for specific goods that are not produced in Australia and for which there are no suitable substitutes available domestically. This instrument was introduced to provide relief to importers and consumers by reducing the customs duty on certain goods, thus making them more affordable. The instrument was made by the Chief Executive Officer of Customs (CEO) in response to an application from Electrolux Home Products for tariff concessions on certain gas cooker trivets. The CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C of the Act. The primary objective of this legislation, as stated in the explanatory statement, is to ensure that the tariff concessions do not disadvantage any person other than the Commonwealth and do not impose any new liabilities on individuals or entities. The instrument came into effect on 10 April 2006, the date the application was lodged, and allows for the importation of the specified goods at a duty-free rate.
Scope and Application
The Tariff Concession Instrument No. 0606439 under the Customs Act 1901 applies specifically to the concession of customs duty on certain gas cooker trivets, following an application by Electrolux Home Products. This legislation pertains to goods that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs, and it operates under the framework established in Part XVA of the Customs Act. The TCO applies to the named goods if no substitutable goods are produced in Australia in the ordinary course of business, which is determined by the criteria outlined in sections 269C, 269D, and 269E of the Act. The instrument has a national jurisdictional reach as it is part of the Commonwealth's customs regulations. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, but it does affect the rights of importers by allowing them to apply for a refund of duty on the specified goods since the TCO came into force on 10 April 2006. The CEO is required to consult by publishing a notice in the Gazette, though in this case, no submissions were received in response.
Key Provisions
The Tariff Concession Instrument No. 0606439, made under the Customs Act 1901, primarily involves the granting of tariff concessions for certain gas cooker trivets. Section 269F of the Act allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria as per section 269C, which includes the condition that no substitutable goods were produced in Australia on the date of the application, the CEO must issue a TCO. In this case, the CEO was satisfied that the application for gas cooker trivets met these criteria, leading to the issuance of TCO No. 0606439 on 30 June 2006.
Under section 269P(3) of the Act, the TCO declares that the specified gas cooker trivets are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%. This TCO came into force on 10 April 2006, as per subsection 269S(1) of the Act, the date on which the application was lodged. Importantly, this TCO does not affect the rights of any person, except the Commonwealth, and does not impose any liabilities on any person for actions taken before the registration date. Importers of these goods will have the benefit of applying for a refund of duty on goods imported since the effective date of the TCO.
The obligations imposed on parties by this Act include the requirement for the CEO to assess applications for TCOs against the core criteria outlined in section 269C, and to publish a notice in the Gazette as per subsection 269K(1) to allow for submissions against the proposed TCO. In this instance, no submissions were received, indicating a consensus on the appropriateness of the concession. Additionally, section 269D, 269E, and 269F of the Act detail specific definitions and conditions that must be met for a TCO to be issued.
Failure to comply with the provisions of the Customs Act 1901, including making false statements or providing misleading information in an application for a TCO, can result in penalties. Under section 283 of the Act, an individual can be liable for a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, for each offence. For a body corporate, the maximum penalty can be up to 50,000 penalty units. These penalties underscore the seriousness with which the Act treats compliance and the accuracy of information provided to the CEO.