EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620004
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 applied for a TCO in respect of certain domestic refrigerator evaporators and/or condensers motors on 20 December 2006.
Instrument
TCO No 0620004 was made on 16 March 2007. It declares that those certain domestic refrigerator evaporators and/or condensers motors 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. 0620004 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 Tariff Concession Instrument No. 0620004, enacted in 2007, amends the Customs Act 1901 by providing tariff concessions for certain domestic refrigerator evaporator and condenser motors, aiming to address the problem of high customs duties on these goods which may have hindered their importation and subsequent availability in the Australian market. The instrument was created under the authority of the Customs Act 1901, administered by the Commonwealth of Australia, with the policy objective of facilitating trade by reducing customs duties where appropriate. The instrument was developed following an application from Electrolux Home Products and subsequent determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thus satisfying the core criteria for tariff concessions. This legislative instrument allows for the duty on these specific goods to be set at free, alleviating the financial burden on importers and potentially lowering consumer prices.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling lower rates of customs duty on certain goods. The scope of this legislation is directed towards individuals and entities that wish to apply for reduced customs duty on goods not produced in Australia, provided that these goods meet the criteria of being substitutable and not being produced domestically in the ordinary course of business. The application process involves submitting an application to the CEO, who then evaluates whether it meets the core criteria outlined in sections 269C, 269D, and 269E of the Act. Once the CEO determines that the application is valid, a written TCO is issued, specifying the prescribed tariff item under the Customs Tariff Act 1995 applicable to the goods in question. This legislative framework extends nationally, affecting all jurisdictions within Australia, and does not disadvantage any person by imposing liabilities for actions taken prior to the TCO's registration date. The application of TCOs can be further detailed or modified through subordinate instruments, thereby offering flexibility and specificity in its implementation.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0620004 are sections 269C, 269B, 269D, 269E, 269P, and 269SJ of the Customs Act 1901. These sections outline the process for applying for and granting a Tariff Concession Order (TCO). Specifically, section 269F allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO, while section 269C details the core criteria that must be met for the application to be considered. Section 269B defines key 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 made, and section 269SJ specifies goods that cannot be the subject of a TCO.
The Act imposes several obligations and requirements on the parties involved in the process of obtaining a TCO. Firstly, the applicant must ensure that the goods for which the TCO is sought are not substitutable goods produced in Australia in the ordinary course of business, as per section 269C. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting any interested party to lodge submissions if they believe the TCO should not be granted, as per subsection 269K(1). The CEO must also ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. If the application meets the core criteria, the CEO must make a written TCO, as per section 269P(3). The TCO will then apply from the date the application was lodged, as per subsection 269S(1).
There are no explicit offences, penalties, or civil/criminal consequences mentioned for breaches of the Act in relation to the TCO process. However, the Act ensures that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO comes into force, as per subsection 269S(3). This means that while the TCO provides tariff benefits, it does not retroactively impose any financial burdens or liabilities on importers or other parties. Importers can benefit from applying for a refund of duty on goods imported since the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations. The Act is designed to streamline the tariff concession process while safeguarding the interests of all parties involved.