EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606689
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 ceramic glass cooktops on 7 April 2006.
Instrument
TCO No 0606689 was made on 30 June 2006. It declares that those certain ceramic glass cooktops 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. 0606689 is taken to have come into force on 7 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. 0606689, enacted under the Customs Act 1901, addresses the problem of ensuring that tariff concessions are granted to goods that cannot be substituted by domestically produced items, thereby maintaining fair trade practices and supporting Australian manufacturing where possible. The Customs Act 1901, as amended, provides a framework for the Chief Executive Officer of Customs to assess applications for Tariff Concession Orders (TCOs) and determine the appropriate duty rates for specific goods. This legislative instrument was introduced to streamline the process for granting tariff concessions while ensuring that such concessions do not undermine local industries. The Tariff Concession Instrument No. 0606689, which came into effect on 7 April 2006, specifically benefits Electrolux Home Products by allowing them to import certain ceramic glass cooktops at a reduced duty rate of free, down from the general rate of 5%, provided no substitutable goods are produced in Australia. This concession aims to facilitate the import of these goods while safeguarding the interests of local producers.
Scope and Application
The Tariff Concession Instrument No. 0606689 under the Customs Act 1901 applies to certain ceramic glass cooktops as specified in the instrument. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to goods that meet specified criteria. The instrument was made in response to an application by Electrolux Home Products, and it declares that the specified goods are subject to a zero rate of duty as no substitutable goods were produced in Australia at the time of the application. The Act’s application is geographically limited to Australia, and it does not apply to goods specified in section 269SJ, which cannot be subject to a TCO. The instrument came into force on the date the application was lodged, 7 April 2006, and does not affect any existing rights or impose new liabilities on any person. The instrument may be extended or modified through further orders made under the Customs Act 1901.
Key Provisions
The Customs Act 1901, as amended, includes provisions for Tariff Concession Orders (TCOs) that can be applied for by individuals or companies (section 269F). These orders permit a lower rate of customs duty on specified goods. For example, TCO No. 0606689 applies to certain ceramic glass cooktops, setting their customs duty rate at free, as opposed to the general rate of 5% (section 269P(3)). The CEO must consider applications against certain criteria, including whether substitutable goods are produced in Australia (section 269C). In this case, the CEO determined that no such goods were produced, satisfying the application criteria.
Entities seeking a TCO must submit an application to the CEO, who must then publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). Following this, the CEO assesses whether the application meets the core criteria. If satisfied, the CEO issues a written TCO (subsection 269P(3)). In the case of TCO No. 0606689, no submissions were received, and the application was approved, resulting in the TCO being issued on 30 June 2006.
The TCO comes into effect on the date the application is lodged (subsection 269S(1)). For TCO No. 0606689, this date is 7 April 2006. Importantly, the TCO does not affect existing rights or impose new liabilities on persons other than the Commonwealth (subsection 269S(1)). Importers benefit as they can apply for duty refunds on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901, including those related to TCO applications, may result in legal consequences. Offences under the Act can lead to penalties, including fines. For example, under section 281 of the Act, a person found guilty of contravening a provision of the Act can be fined up to 10,000 penalty units or imprisonment for five years, or both, depending on the severity of the offence. Additionally, civil penalties can be applied for breaches, which vary depending on the specific provision contravened.