EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612483
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 gas cooker valves on 26 July 2006.
Instrument
TCO No 0612483 was made on 13 October 2006. It declares that those certain gas cooker valves 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 10%. 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. 0612483 is taken to have come into force on 26 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides for the imposition of tariffs and duties on imported goods, and includes provisions for tariff concessions to support certain industries and economic activities. The Tariff Concession Instrument No. 0612483 was introduced to address the specific need for tariff relief on certain gas cooker valves, as requested by Electrolux Home Products Pty Ltd. The problem this legislation aimed to address was the potential absence of Australian-produced substitutable goods, thereby meeting the core criteria for tariff concessions under the Customs Act 1901. The policy objective of this instrument is to ensure that if no substitutable goods are produced in Australia, the application for a tariff concession can proceed, ultimately benefiting importers by potentially reducing or eliminating customs duty on these specific goods.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0612483, applies to any individual or entity seeking tariff concession orders (TCO) for specific goods, provided these goods meet the criteria set out in the Act. Specifically, the Act allows the Chief Executive Officer of Customs to grant TCOs that reduce the customs duty on certain goods, provided that no substitutable goods are produced in Australia and the application meets the core criteria outlined in the Act. This instrument pertains to the importation of goods into Australia and is applicable nationally across the Commonwealth, subject to the terms and conditions set forth in the Customs Act 1901 and the Customs Tariff Act 1995. The instrument excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The scope of the Act can be further defined or expanded through subordinate instruments, which may provide additional criteria or details regarding the application and implementation of tariff concessions.
Key Provisions
The Customs Act 1901, under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. These orders provide for lower rates of customs duty on specified goods, as outlined in section 269F. If an application for a TCO is made and the CEO determines it does not pertain to goods excluded by section 269SJ, the CEO must then assess whether the application meets the core criteria. According to section 269C, an application meets these criteria if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of key terms, such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," are provided in sections 269D, 269E, and 269B, respectively.
Entities applying for a TCO must ensure their applications are made under the correct provisions and that they meet the criteria specified by the Act. If the CEO is satisfied that the application meets the core criteria, a written order is issued as a TCO under subsection 269P(3). This TCO will then specify the reduced rate of duty for the goods, as indicated in the relevant item of Schedule 4 to the Customs Tariff Act 1995. For instance, TCO No. 0612483, made on 13 October 2006, pertains to certain gas cooker valves, which now have a 0% duty rate instead of the general 10% rate.
Upon accepting a valid TCO application, the CEO is required by subsection 269K(1) to publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not proceed. In the case of TCO No. 0612483, no submissions were received in response to the notice. The TCO is deemed to come into effect on the date the application was lodged, as per subsection 269S(1). Therefore, TCO No. 0612483 is considered effective from 26 July 2006. Importantly, this order does not disadvantage any person, nor does it impose liabilities on anyone in respect of actions taken prior to the date of registration.
The TCO provides benefits to importers of the specified goods by allowing them to apply for a refund of duties paid since the effective date of the TCO, as stipulated under paragraph 126(1)(r) of the Regulations. This mechanism ensures that importers are not adversely affected and can take advantage of the reduced duty rates provided by the TCO.