EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618250
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.
E.G.O. Australia Pty Ltd applied for a TCO in respect of certain cooker parts on 06 November 2006.
Instrument
TCO No 0618250 was made on 19 January 2007. It declares that those certain cooker parts 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. 0618250 is taken to have come into force on 06 November 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. 0618250 was enacted under the Customs Act 1901 with the objective of providing tariff concessions for certain goods that are not produced in Australia, thus ensuring that Australian businesses do not face unnecessary competitive disadvantages. This legislative instrument was introduced to address a specific gap in the tariff regime by allowing for reduced customs duties on imported goods where there is no local production of substitutable goods. The instrument was initiated by an application from E.G.O. Australia Pty Ltd for tariff concessions on certain cooker parts. The instrument was created by the Chief Executive Officer of Customs, who determined that the application met the core criteria set out in the Act, specifically that no substitutable goods were produced in Australia. The instrument, which came into effect on 6 November 2006, declares that the cooker parts in question are subject to a zero percent duty rate, significantly reducing the financial burden on importers and potentially stimulating market competition and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0618250 applies to the goods specified in the Instrument, which in this case are certain cooker parts, and is subject to the provisions of the Customs Act 1901. The Act empowers the Chief Executive Officer of Customs to grant tariff concessions for goods not produced in Australia, as per section 269F, if certain criteria are met. This instrument affects entities such as E.G.O. Australia Pty Ltd, which can apply for these concessions, and it applies nationally across Australia as it is governed by Commonwealth law. Exclusions from this concession include goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. The Instrument extends the application of the Customs Act by providing specific relief for the named goods, reducing their customs duty rate to free from the general rate of 5%. The commencement of this Instrument is effective from the date the application was lodged, 6 November 2006, and it does not retroactively affect any rights or impose any liabilities for actions prior to its effective date.
Key Provisions
The Customs Act 1901 provides a framework for the application and implementation of Tariff Concession Orders (TCOs) as detailed in Part XVA. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specified goods. If the application is not for goods listed in section 269SJ, which are ineligible for a TCO, the CEO must then assess whether the application meets the core criteria outlined in section 269C. For a TCO application to meet these criteria, it must be demonstrated that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively.
The CEO's obligations under the Act are clearly defined. If the CEO is satisfied that the application meets the core criteria, they are mandated to issue a written TCO, as stipulated in section 269P(3). This order specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed. In the case of TCO No 0618250, which pertains to certain cooker parts, the CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria, and the TCO was subsequently issued.
The Act imposes specific requirements and potential consequences for non-compliance. While the TCO does not retroactively affect the rights of any person other than the Commonwealth, it does benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person. However, failure to adhere to the provisions of the Act or the conditions of a TCO could lead to various legal consequences. These may include civil or criminal penalties, depending on the nature and severity of the breach, though specific penalties are not detailed within the explanatory statement.