EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704514
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 domestic refrigerator control housing assemblies on 27 March 2007.
Instrument
TCO No 0704514 was made on 15 June 2007. It declares that those certain domestic refrigerator control housing 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. 0704514 is taken to have come into force on 27 March 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. 0704514, enacted in 2007, addresses the gap in the Customs Act 1901 by providing tariff concessions for specific goods, in this case, domestic refrigerator control housing assemblies. The legislation was introduced to facilitate easier importation of these goods by reducing the customs duty to zero, provided that no substitutable goods were being produced in Australia at the time of the application. The instrument was made by the Chief Executive Officer of Customs following an application by Electrolux Home Products Pty Ltd, and it came into force on the date the application was lodged, 27 March 2007. This initiative aimed to support the importation process by offering a tariff concession, thereby benefiting importers who could now apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to goods specified by an applicant and result in a lower rate of customs duty for those goods. Any person can apply for a TCO, provided the goods in question are not among those explicitly excluded by section 269SJ of the Act. The CEO must determine whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia at the time of application. If the CEO is satisfied that the criteria are met, they are required to make a written order that specifies the goods to which a particular item in the Customs Tariff Act 1995 applies. The instrument, such as Tariff Concession Instrument No. 0704514, declares that certain domestic refrigerator control housing assemblies are subject to a TCO, resulting in a duty-free rate. The process involves publishing a notice in the Gazette to invite submissions from interested parties, though no submissions were received for this particular instrument. The TCO takes effect from the date the application was lodged and does not adversely affect the rights of any person, nor does it impose any liabilities. Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) includes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (s 269C). A TCO applies a lower rate of customs duty to the specified goods (s 269F). A person may apply to the CEO for a TCO in respect of goods (s 269F). If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, the CEO must decide whether the application meets the core criteria (s 269C). 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 (s 269P(3)).
The Act imposes certain obligations on the CEO with respect to TCOs. The CEO must make a TCO if the application meets the core criteria (s 269C). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (s 269K(1)). In the case of TCO No. 0704514, the CEO did not receive any submissions in response to this invitation (Explanatory Statement).
Breaching the conditions set out in the Act can result in various penalties and consequences. However, the Explanatory Statement does not specify any particular offences, penalties, or civil/criminal consequences for breach in relation to TCOs. The focus of the legislation appears to be on the process for applying for and issuing TCOs, rather than on the consequences of failing to comply with the Act. Nonetheless, the CEO’s decision-making process regarding TCO applications is subject to judicial review, which could lead to the setting aside of a TCO if it is found to be unlawful or unreasonable (Administrative Decisions (Judicial Review) Act 1977).