EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608906
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 induction frameless motors on 23 May 2006.
Instrument
TCO No 0608906 was made on 11 August 2006. It declares that those certain induction frameless motors 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. 0608906 is taken to have come into force on 23 May 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. 0608906, enacted under the Customs Act 1901, was introduced to address the specific need for tariff concessions on certain goods that are not produced domestically. This instrument was necessitated by the provisions in Part XVA of the Act, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods, provided they are not substitutable by locally produced goods. The Act specifies that for a TCO to be valid, the goods in question must not have substitutable counterparts produced in Australia. Electrolux Home Products Pty Ltd applied for such a concession for certain induction frameless motors, and after a review, the CEO determined that no Australian-made equivalents existed, thus satisfying the core criteria for the concession. The policy objective behind this legislation is to promote economic efficiency by ensuring that tariff concessions are granted only when necessary, thus encouraging the importation of goods that are not domestically produced.
Scope and Application
The Tariff Concession Instrument No. 0608906, made under the Customs Act 1901, pertains to the application and issuance of Tariff Concession Orders (TCOs) for specific goods. This legislation applies to entities or individuals who seek a concession on the customs duty for goods imported into Australia, provided that such goods do not fall under the exclusions specified in section 269SJ of the Act and meet the core criteria outlined in sections 269C, 269D, 269E, and 269F. The Act operates on a Commonwealth level, with the CEO of Customs having the authority to approve or deny TCO applications based on the criteria set forth in the Customs Act 1901 and the Customs Tariff Act 1995. The geographic reach of this legislation is national, as it applies to all imports into Australia. The application process involves a public notice period allowing interested parties to submit objections, although in this instance, no submissions were received. The commencement date for this specific TCO is backdated to the date of the application, 23 May 2006, ensuring that no person other than the Commonwealth is disadvantaged or incurs liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0608906, made under the Customs Act 1901 (the Act), specifically addresses the concession of customs duty on certain induction frameless motors. Section 269P(3) mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, they must issue a written order that applies a prescribed item from Schedule 4 of the Customs Tariff Act 1995 to the goods in question. In this case, the CEO has declared that the certain induction frameless motors are subject to item 50 of the Tariff, resulting in a customs duty rate of 0% instead of the general rate of 5%.
Under the Act, section 269C outlines that an application for a TCO meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions provided in sections 269D and 269E clarify the terms 'goods produced in Australia' and 'ordinary course of business'. Meanwhile, section 269B defines 'substitutable goods' as those produced in Australia that are put, or are capable of being put, to a use corresponding with a use to which the goods the subject of the application can be put. This means that if no such Australian-made goods exist, the CEO must proceed with the TCO.
The Act imposes obligations on the CEO to process and assess TCO applications under section 269F. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit their views on why the TCO should not be made. The CEO must then consider these submissions before making a final decision. In the instance of TCO No. 0608906, no submissions were received, leading to the issuance of the TCO.
The Act does not explicitly state any offences or penalties for non-compliance with the provisions related to TCOs. However, breaches of customs regulations generally may result in civil or criminal penalties, including fines and imprisonment, as outlined in other parts of the Customs Act. The specific penalties for breaches related to TCOs would depend on the broader customs law context and any additional regulations or instruments that might apply.