EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611598
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 dishwasher pumps on 11 July 2006.
Instrument
TCO No 0611598 was made on 22 September 2006. It declares that those certain dishwasher pumps 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. 0611598 is taken to have come into force on 11 July 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. 0611598 was enacted in 2006 under the Customs Act 1901, which established a framework for granting tariff concessions to certain goods. This legislation was introduced to address the need for a streamlined process by which businesses could apply for reduced customs duty rates on specific imported goods, provided certain criteria were met. The instrument was made by the Chief Executive Officer of Customs (CEO) following an application from Electrolux Home Products Pty Ltd for tariff concessions on certain dishwasher pumps. The CEO determined that these goods qualified for the concession as no substitutable goods were produced in Australia at the time of the application. The policy objective of this measure is to support Australian industries by ensuring that tariff concessions are granted only when there are no domestically produced alternatives, thereby encouraging the use of local production and reducing the reliance on imports.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the provisions under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking tariff concessions for specific goods, ensuring that these goods are not substitutable by Australian-produced goods and are not listed in section 269SJ, which details goods ineligible for TCOs. The application of the Act is national, extending across the Commonwealth of Australia. Exclusions are explicitly stated in section 269SJ, which details the goods that cannot be subject to a TCO. The application and scope of the Act can be further defined through subordinate instruments, allowing for specific clarifications and adjustments as needed. The TCO issued under this Act does not affect the rights of any person as of the date of registration, ensuring that it does not disadvantage or impose liabilities on anyone for actions taken prior to the order’s registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0611598, which relates to a Tariff Concession Order (TCO) for certain dishwasher pumps, include section 269C (2) and section 269P(3) of the Customs Act 1901. Section 269C(2) mandates that a TCO application will meet the core criteria if no substitutable goods are produced in Australia on the day the application was lodged. Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to issue a written TCO if satisfied that the application meets the core criteria. This particular TCO (No. 0611598) declares that the specified dishwasher pumps are subject to a zero percent duty rate, reducing it from the general 5 percent rate.
The Act imposes several obligations on the parties it governs. Firstly, applicants for a TCO, such as Electrolux Home Products Pty Ltd, must ensure their application meets the core criteria set out in section 269C of the Act. This involves proving that no substitutable goods were produced in Australia on the day the application was made. Secondly, the CEO must follow the stipulated procedures, including publishing a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as per section 269K(1). Additionally, the CEO must assess the application against the criteria in section 269C and, if satisfied, make a TCO as outlined in section 269P(3).
In terms of legal consequences, breaches of the provisions or misuse of the TCO could lead to significant penalties. While the specific penalties are not detailed in the explanatory statement, the Customs Act 1901 generally provides for both civil and criminal penalties for breaches, including fines and imprisonment. For example, under section 254 of the Act, a person who contravenes the Act may be liable for a penalty of up to $22,200 or three times the value of the goods involved, whichever is greater. Additionally, section 255 of the Act may lead to criminal charges for wilful or negligent breaches, potentially resulting in imprisonment for up to five years.
Overall, the Tariff Concession Instrument No. 0611598 sets out a clear process for the application and implementation of a TCO, ensuring that the designated goods benefit from reduced customs duty rates. It also outlines the obligations and potential consequences for both applicants and the CEO, emphasizing the importance of compliance with the Act.