EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618406
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.
Major Electrical Appliances applied for a TCO in respect of certain rangehoods on 09 November 2006.
Instrument
TCO No 0618406 was made on 30 January 2007. It declares that those certain rangehoods 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. 0618406 is taken to have come into force on 09 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 Customs Act 1901, as amended, facilitates the application of tariff concessions on certain goods through the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism was enacted to address the need for flexible tariff structures that can accommodate the specific economic and industrial needs of various sectors, ensuring that Australian businesses remain competitive. The policy objective is to provide relief by reducing customs duties on goods for which there are no substitutable Australian-produced alternatives, thus encouraging the import of these goods. The process involves an application by interested parties, assessment by the CEO against specific criteria, and potential publication in the Gazette to allow for public submissions, although none were received for TCO No. 0618406. This instrument specifically grants tariff concessions on certain rangehoods, setting their duty rate to free, a significant reduction from the general rate of 5%, and it came into effect on the date the application was lodged, 9 November 2006.
Scope and Application
The Tariff Concession Order No. 0618406 made under the Customs Act 1901 provides for tariff concessions on certain rangehoods, specifically those applied for by Major Electrical Appliances. This instrument applies to the goods identified in the application, which, under section 269P(3) of the Act, must meet the core criteria for a tariff concession order, including the absence of substitutable goods produced in Australia in the ordinary course of business. The geographic and jurisdictional reach of this Act is federal, as it falls under the purview of the Commonwealth of Australia, and it applies to all entities involved in the importation of these specific rangehoods. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons in relation to actions taken prior to the date of the TCO's registration. Subordinate instruments may further define and extend the application of this Act, ensuring compliance and proper administration of tariff concessions.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269SJ of the Customs Act 1901 (the Act), which lay out the criteria for Tariff Concession Orders (TCOs) and the process for making such orders. Section 269C specifies the core criteria for a TCO, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (269C). Section 269P(3) outlines the procedure for the Chief Executive Officer of Customs (the CEO) to make a written TCO if the application meets these core criteria (269P(3)). Finally, section 269SJ lists the goods that cannot be subject to a TCO (269SJ).
The obligations imposed on parties or entities governed by this Act include the requirement for applicants to ensure that their TCO application meets the core criteria, particularly that no substitutable goods were produced in Australia in the ordinary course of business on the day the application is lodged. The CEO is obligated to assess applications against these criteria and make a decision on whether to issue a TCO. If a TCO is issued, the CEO must also publish a notice in the Gazette inviting submissions from any interested parties (269K(1)). The CEO’s duty to consider any submissions received is implicit in the requirement to assess applications thoroughly.
There are no explicit offences or penalties outlined in the explanatory statement for the failure to comply with the requirements of the Act. However, the legal consequences of not meeting the criteria for a TCO may include the CEO's refusal to issue the order, which would mean that the general customs duty rate would apply to the goods in question. The Act does not impose any civil or criminal penalties for breaches of its provisions as related to TCOs. Nonetheless, the failure to comply with the Act's requirements could result in the applicant not receiving the intended tariff concession, potentially leading to higher import costs.