EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609750
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 reluctance switched motors on 08 June 2006.
Instrument
TCO No 0609750 was made on 25 August 2006. It declares that those certain reluctance switched 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 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. 0609750 is taken to have come into force on 08 June 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. 0609750 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain imported goods that are not produced domestically. This instrument was introduced to provide relief to importers by allowing them to apply for reduced customs duty rates on specific goods that are not being manufactured in Australia. The Australian Government, through the Chief Executive Officer of Customs, is the enacting body, and the policy objective is to facilitate the importation of goods that have no domestic substitutes, thereby supporting trade and potentially lowering consumer costs.
This instrument was prompted by an application from Electrolux Home Products Pty Ltd for a tariff concession on certain reluctance switched motors, which was subsequently approved as there were no substitutable goods produced in Australia. The concession resulted in a duty rate of free, down from the general rate of 5%. The instrument's commencement date aligns with the date the application was lodged, ensuring that the benefits of the tariff concession are effective from the date of application. Importantly, this instrument does not disadvantage any person or impose new liabilities, and it provides for potential duty refunds to importers of the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0609750, issued under the Customs Act 1901, applies to specific goods—namely, certain reluctance switched motors—that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This legislation is relevant to those entities, including businesses and individuals, who are involved in the import and production of these goods. The TCO ensures that these particular motors benefit from a reduced rate of customs duty, which otherwise stands at 5%, down to a free rate as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The geographic scope of the Act is national, impacting all entities involved in the import of these goods across Australia. The TCO does not extend to goods specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. Furthermore, the TCO ensures that no existing rights or liabilities of non-Commonwealth persons are adversely affected by its implementation, thereby safeguarding the interests of importers who may be eligible for duty refunds on previously imported goods.
Key Provisions
The Tariff Concession Instrument No. 0609750 under the Customs Act 1901 provides the framework for granting tariff concessions on certain goods, specifically reluctance switched motors in this case (sections 269F and 269P(3)). When an applicant, such as Electrolux Home Products Pty Ltd, applies for a Tariff Concession Order (TCO) and the Chief Executive Officer of Customs (CEO) determines that no substitutable goods are produced in Australia, a TCO can be issued. This order effectively reduces the duty on specified goods from the general rate to zero (section 269C). In this instance, the TCO was issued on 25 August 2006, making it effective from 08 June 2006, the date of application.
The obligations imposed on the CEO by this Act are primarily procedural. Upon receiving a valid application, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). In this case, no submissions were received. The CEO must then decide if the application meets the core criteria, which involves ensuring that no substitutable goods are produced in Australia at the time of the application (section 269C). If the criteria are met, the CEO is mandated to issue a written TCO.
Failure to comply with the Act’s requirements may lead to legal consequences. While the Explanatory Statement does not detail specific offences or penalties, breaches of the Customs Act 1901 can result in substantial fines and, in severe cases, imprisonment. The specific penalties for non-compliance would depend on the nature and severity of the breach, as outlined in other sections of the Act and related legislation. For instance, section 269SJ specifies goods that cannot be subject to a TCO, and any deviation from these provisions could attract penalties. Additionally, the Tariff Concession Instrument itself does not specify penalties but operates under the broader legal framework of the Customs Act 1901.