EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620003
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 Limited applied for a TCO in respect of certain domestic evaporators and/or condensers fan assemblies on 20 December 2006.
Instrument
TCO No 0620003 was made on 16 March 2007. It declares that those certain domestic evaporators and/or condensers fan assemblies 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. 0620003 is taken to have come into force on 20 December 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 Australian Parliament, provides a framework for the regulation of customs duties and the administration of tariffs. One of its features is the ability to grant Tariff Concession Orders (TCOs) to reduce or eliminate customs duty on certain imported goods. The Tariff Concession Instrument No. 0620003 was introduced to facilitate the application process for a TCO by Electrolux Home Products Pty Limited for certain domestic evaporators and/or condensers fan assemblies, effective from 20 December 2006. The primary objective of this instrument is to ensure that the application of the concession aligns with the legislative criteria, specifically confirming that no substitutable goods were produced in Australia at the time of application, thereby allowing for a lower duty rate of 0% on these specified goods.
Scope and Application
The Customs Act 1901 applies to all individuals, businesses, and entities involved in importing goods into Australia, as well as the Commonwealth and state governments responsible for customs regulation. The Act's scope encompasses the application process for Tariff Concession Orders (TCOs) that reduce or eliminate customs duties on specific imported goods, provided that no substitutable goods are produced in Australia. The Act mandates that the Chief Executive Officer of Customs must make a TCO if an application is submitted and the core criteria are met, as outlined in sections 269C and 269F. Additionally, the Act includes provisions for public consultation on TCO applications, as stipulated in subsection 269K(1). The geographic reach of the Act is national, and it is applicable across all states and territories of Australia. Any exclusions or exemptions from the application of the Act are specified within the relevant sections, particularly section 269SJ, which lists goods that cannot be subject to a TCO. The Act’s application can be extended or restricted through subordinate instruments, such as regulations under the Customs Tariff Act 1995.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0620003, made under the Customs Act 1901, include section 269C, which sets out the core criteria that an application for a Tariff Concession Order (TCO) must meet. Specifically, for a TCO to be granted, there must be no goods that are substitutable for the goods in question produced in Australia on the date the application is lodged (section 269C). Additionally, section 269P(3) stipulates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The instrument, TCO No. 0620003, declares that certain domestic evaporators and/or condensers fan assemblies are goods to which item 50 of Schedule 4 applies, thereby granting them a tariff concession.
The Customs Act 1901 imposes certain obligations on the CEO of Customs when considering an application for a TCO. Under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. Furthermore, under section 269S(1), the TCO is deemed to have come into force on the day the application is lodged. The CEO must also ensure that the TCO does not affect the rights of any person adversely, particularly in relation to anything done or omitted before the date of registration. The TCO No. 0620003 does not impose any new liabilities on any person and does not disadvantage any person except the Commonwealth.
Any breach of the provisions set out in the Customs Act 1901 or the associated regulations could lead to various penalties and consequences. While the specific offences and penalties are not detailed in this particular instrument, under the Customs Act, offences can include the importation or exportation of goods in contravention of the Act, which could result in substantial fines and, in some cases, imprisonment. The maximum penalties depend on the nature and severity of the offence, but they can include fines up to a significant amount and imprisonment for terms that vary based on the specific breach. Additionally, failure to comply with the conditions of a TCO, if such conditions were to be imposed, could result in civil or criminal consequences as per the relevant sections of the Customs Act.