EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700202
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.
Moffat Pty Limited applied for a TCO in respect of certain convection and steam ovens on 04 January 2007.
Instrument
TCO No 0700202 was made on 23 March 2007. It declares that those certain convection and steam ovens 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. 0700202 is taken to have come into force on 04 January 2007.
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. 0700202 was enacted in 2007 under the Customs Act 1901 to address the need for tariff concessions on specific goods that were not being produced domestically, thereby providing economic benefits to importers and potentially increasing competition within the market. The instrument was introduced to facilitate a reduction in customs duty on certain convection and steam ovens, which were subject to a general rate of 5%. The objective of this legislation, as articulated within the Customs Act, is to ensure that tariff concessions are granted when no substitutable goods are produced in Australia, thereby fostering a fair and competitive market while benefiting Australian importers. The instrument was developed following an application by Moffat Pty Limited and was approved by the Chief Executive Officer of Customs, who determined that the concession would not disadvantage any domestic industry as no substitutable goods were being produced locally.
Scope and Application
The Tariff Concession Instrument No. 0700202, established under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO), which in this case are certain convection and steam ovens. The Act enables the Chief Executive Officer of Customs to reduce the rate of customs duty on goods provided that they meet certain criteria, such as the absence of substitutable goods produced in Australia. This instrument specifically applies to Moffat Pty Limited’s application for a TCO concerning the aforementioned ovens, where the general duty rate of 5% is reduced to free duty. The geographic and jurisdictional reach of this legislation is national, governed by the Commonwealth, and it does not extend to other states or territories unless explicitly stated. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. Importantly, the TCO does not affect the rights of any person as at the date of registration in a manner that would disadvantage them or impose liabilities for actions taken prior to the registration date.
Key Provisions
The Tariff Concession Instrument No. 0700202, under the Customs Act 1901, applies to certain convection and steam ovens and sets a free rate of duty for these goods, which contrasts with the general rate of 5% (Section 269P(3)). An application for a Tariff Concession Order (TCO) was submitted by Moffat Pty Limited on 04 January 2007, and following the satisfaction of the Chief Executive Officer of Customs (CEO) that no substitutable goods were produced in Australia in the ordinary course of business, the CEO issued TCO No. 0700202 on 23 March 2007. This order declares that the specified ovens are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations on applicants and the CEO. Section 269F allows a person to apply for a TCO in respect of goods, provided that the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO is mandated under section 269K(1) to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be made. In this instance, the CEO did not receive any submissions.
The Customs Act 1901 outlines consequences for breaches of its provisions. While the explanatory statement does not specify particular offences, breaches of the Customs Act generally could lead to civil or criminal penalties. These penalties may include fines and imprisonment, with the exact penalties depending on the nature and severity of the breach. The Act ensures that the rights of persons are protected by stating that a TCO does not affect rights as at the date of registration to the disadvantage of that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (Subsection 269S(1)). Importantly, the TCO does not impose any liabilities on any person, safeguarding them against retrospective liabilities.