EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616108
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.
Nilfisk Advance Pty Ltd applied for a TCO in respect of certain vacuum cleaners on 29 August 2006.
Instrument
TCO No 0616108 was made on 24 November 2006. It declares that those certain vacuum cleaners 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. 0616108 is taken to have come into force on 29 August 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, as amended, introduced a scheme to facilitate tariff concession orders (TCO) which allows the Chief Executive Officer of Customs to grant lower rates of customs duty on specified goods, addressing the need to support Australian industries and consumers by potentially reducing import costs. Enacted by the Parliament of Australia, this legislation aims to ensure that the Australian market remains competitive and accessible, particularly in cases where domestic production of equivalent goods is not viable. The Tariff Concession Instrument No. 0616108, made on 24 November 2006, is an example of this scheme in action, providing a zero per cent duty rate for certain vacuum cleaners applied for by Nilfisk Advance Pty Ltd, reflecting the policy objective of encouraging importation of goods where local production is not feasible or economically justified.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide reduced rates of customs duty on certain goods, applicable to those who import them. The legislation applies to any person or entity seeking to import goods into Australia, provided the goods do not fall under the specified exclusions in section 269SJ of the Act. The application process requires the CEO to determine if the goods in question are not substitutable by goods produced in Australia and meet the criteria outlined in section 269C. The TCO scheme is applicable across the Commonwealth of Australia, and the concessions granted do not affect the rights of any person as at the date of registration, nor do they impose new liabilities. This instrument, Tariff Concession Instrument No. 0616108, was made to lower the duty on certain vacuum cleaners from 5% to 0%, effective from 29 August 2006, the date the application was lodged. The CEO published a notice in the Gazette inviting submissions, which were not received, leading to the issuance of the TCO.
Key Provisions
The main operative sections of this legislation, specifically Instrument TCO No. 0616108, include sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F outlines the process by which an application for a Tariff Concession Order (TCO) can be submitted to the Chief Executive Officer of Customs (CEO) for consideration. Section 269C specifies the core criteria that must be met for the CEO to approve a TCO, which includes ensuring that no substitutable goods were produced in Australia at the time of application. If the CEO is satisfied that the application meets these criteria, section 269P requires the CEO to issue a written TCO, as was done in this case with item 50 of Schedule 4 to the Tariff, effectively reducing the duty on the specified vacuum cleaners from 5% to 0%. Section 269S provides that a TCO is to be considered effective from the date the application was lodged, in this case, 29 August 2006.
The obligations imposed by the Act on parties, particularly Nilfisk Advance Pty Ltd, include the requirement to ensure that their application for a TCO is valid and meets the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia at the time of the application. Additionally, the CEO has obligations under section 269K to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, although in this case, no submissions were received. The CEO must also ensure that any TCO issued complies with the Act, including the requirement under section 269S that the TCO comes into force from the date the application was lodged.
There are no specific offences outlined in the explanatory statement that would result in criminal or civil penalties for breach. However, the Act generally provides that any misuse of a TCO or non-compliance with its terms could potentially lead to penalties under other sections of the Customs Act 1901 or associated regulations. For instance, while not explicitly stated in this context, breaches of the Customs Act can lead to fines and imprisonment. The absence of specific penalties in this context suggests that compliance is expected to be straightforward and governed by the general provisions of the Act.