EXPLANATORY STATEMENT
Tariff Concession Instrument No. 062218
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 Ltd applied for a TCO in respect of certain freezers on 12 January 2006.
Instrument
TCO No 062218 was made on 24 March 2006. It declares that those certain freezers 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. 062218 is taken to have come into force on 12 January 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. 062218, enacted in 2006, addresses a specific issue under the Customs Act 1901 by providing tariff concessions for certain goods. This instrument was introduced to facilitate the application of lower rates of customs duty on specified goods, thereby supporting trade and economic activities by reducing the financial burden on importers. The Customs Act 1901, administered by the Parliament of Australia, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) if certain criteria are met. In this instance, the CEO determined that the application for tariff concessions for certain freezers met the core criteria, leading to the issuance of TCO No. 062218. This order effectively reduces the duty on these freezers from the general rate of 5% to 0%, enhancing the competitiveness of imported goods in the Australian market.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 062218, applies to goods for which a Tariff Concession Order (TCO) is sought by an applicant, such as Electrolux Home Products Pty Ltd, to reduce the customs duty on those goods. The Act permits the Chief Executive Officer of Customs to grant TCOs if certain criteria are met, specifically if no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The application process involves a notice being published in the Gazette, inviting objections, which did not occur in this case, indicating the CEO received no submissions against the application. This instrument has a national jurisdictional reach, affecting imports across Australia and is not limited to specific states or territories. The exclusions are outlined in section 269SJ of the Act, which specifies goods that cannot be subject to a TCO, although these are not detailed in the explanatory statement. The application of this TCO is effective from the date the application was lodged, which in this instance is 12 January 2006, without retroactive effect on pre-existing rights or liabilities.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 062218 pertain to the Customs Act 1901 and the Customs Tariff Act 1995. Specifically, section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), while section 269C outlines the core criteria for such an order to be granted. This process involves determining whether substitutable goods are produced in Australia (section 269D), and whether such production occurs in the ordinary course of business (section 269E). If these criteria are met, the CEO must issue a written order (section 269P(3)) declaring the goods to which the tariff concession applies. In this particular case, Instrument TCO No. 062218, made on 24 March 2006, specifies that certain freezers are subject to a zero percent duty rate, as opposed to the general rate of 5 percent.
The Act imposes several obligations on the parties involved, primarily the CEO and the applicant. For the CEO, the key obligations are to determine whether the application meets the core criteria, as outlined in section 269C, and to make a written order if satisfied that the application is valid. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K(1), although no submissions were received for this particular TCO. The applicant, in this case Electrolux Home Products Pty Ltd, must provide all necessary information and evidence to support their application for a TCO. Additionally, the applicant must ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO.
The Act provides for potential consequences in the event of non-compliance with its provisions. Although specific offences are not detailed in the explanatory statement, breaches of the Customs Act 1901 can lead to criminal charges, fines, and imprisonment. For instance, under section 255 of the Act, knowingly or recklessly making a false statement in an application can result in penalties of up to two years in prison or a fine of up to 10,000 penalty units, or both. Furthermore, any person found to be deliberately circumventing the provisions of the Act could face additional penalties, including potential civil liability for any losses incurred by the Commonwealth or other affected parties. It is important for all parties to adhere strictly to the requirements set forth in the Act to avoid these consequences.