EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615904
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 refrigerators on 16 October 2006.
Instrument
TCO No 0615904 was made on 22 December 2006. It declares that those certain refrigerators 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. 0615904 is taken to have come into force on 16 October 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. 0615904 was enacted in 2006 as part of the Customs Act 1901 to address the issue of tariff concessions for specific goods, in this case certain refrigerators, by reducing the customs duty from the general rate of 5% to 0%. The instrument was introduced to provide relief to businesses and consumers by lowering the cost of imported goods, thereby encouraging trade and consumption. The instrument was enacted by the Chief Executive Officer of Customs (CEO) in response to an application by Electrolux Home Products Pty Ltd on 16 October 2006, and was made on 22 December 2006. The process involved ensuring that no substitutable goods were produced in Australia at the time of the application, thereby satisfying the core criteria set out in the Customs Act. The instrument became effective on the date of application, 16 October 2006, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0615904 under the Customs Act 1901 applies specifically to certain refrigerators imported by Electrolux Home Products Pty Ltd, providing them with a concessionary rate of customs duty. The Act facilitates the reduction or exemption of customs duty on specified goods through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs, provided that the application meets the core criteria outlined in section 269C, which include the absence of substitutable goods produced in Australia. This legislation benefits the applicants and relevant importers by lowering the customs duty from the general rate of 5% to 0% for the specified refrigerators, as declared in the instrument. The instrument's geographic reach is national, applying across Australia, and it extends to any person or entity importing the specified goods post the effective date of the application, 16 October 2006. Importantly, the TCO does not affect any existing rights or impose new liabilities on persons other than the Commonwealth, ensuring that it only confers benefits on the applicants and relevant importers without retroactive disadvantages.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0615904 under the Customs Act 1901 (section 269C, 269B, 269P(3)) detail the conditions under which the Chief Executive Officer of Customs (CEO) can grant a Tariff Concession Order (TCO). Specifically, section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged for the TCO to be considered valid. Section 269B defines critical terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, a TCO must be issued.
Under this legislation, the CEO has the obligation to assess applications for TCOs and determine if they meet the core criteria specified in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO can proceed to issue the TCO. Moreover, the TCO does not affect any pre-existing rights of parties other than the Commonwealth and does not impose any liabilities on any person for actions taken before the TCO's registration date (subsection 269S(1)).
In terms of penalties and consequences, the Act does not explicitly state penalties for non-compliance with the TCO provisions. However, if any party breaches the terms of the TCO or engages in fraudulent activities to secure a concession, they could face civil or criminal consequences under the broader Customs Act 1901 or other relevant legislation. The penalties for such offences can include fines and imprisonment, depending on the severity of the breach and the discretion of the court.