EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707661
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 combination washer dryers on 23 May 2007.
Instrument
TCO No 0707661 was made on 03 August 2007. It declares that those certain domestic combination washer dryers 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. 0707661 is taken to have come into force on 23 May 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs and excise duties in Australia. It was introduced to address the need for a systematic approach to managing the import and export of goods, ensuring revenue collection, and protecting local industries. One of the mechanisms within this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows for the reduction or exemption of customs duty on certain goods, provided specific criteria are met. The explanatory statement for Tariff Concession Instrument No. 0707661 outlines the process whereby Electrolux Home Products Pty Limited applied for and was granted a tariff concession on certain domestic combination washer dryers, effective from 23 May 2007, the date the application was lodged. The instrument was made on 3 August 2007, following a determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, satisfying the core criteria for the concession. The policy objective here is to facilitate trade and support local industries by ensuring that the application of customs duties does not unduly burden businesses in competitive circumstances.
Scope and Application
The Tariff Concession Instrument No. 0707661 under the Customs Act 1901 applies to goods, specifically domestic combination washer dryers, for which a Tariff Concession Order (TCO) has been approved. This instrument pertains to entities that apply for and are granted such concessions, enabling them to import the specified goods at a reduced rate of customs duty. The scope of the Act is limited to the goods mentioned in the application and the conditions stipulated in the TCO, and it does not extend to any other goods not specified in the order. Geographically, the application of this legislation is national, as it pertains to customs and tariff regulations under Australian law. There are specific exclusions outlined in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act may be further extended or restricted through subordinate instruments, which could include regulations or further orders made under the authority of the Customs Act 1901. The TCO, once registered, benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the order, which is the date the application was lodged.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0707661, introduces specific provisions for Tariff Concession Orders (TCOs) which lower the customs duty on certain goods. Section 269F (2) outlines the process where an application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO). The CEO must then assess whether the application meets the core criteria as stipulated in sections 269C and 269SJ of the Act. If the application does not concern goods that are explicitly excluded from TCOs, and if the CEO determines that no substitutable goods are produced in Australia, a TCO can be issued.
Once the CEO determines that the application meets the core criteria, a TCO is issued under section 269P(3). This written order declares that the specified goods are subject to a reduced rate of customs duty, as outlined in Schedule 4 to the Customs Tariff Act 1995. For the specific case of certain domestic combination washer dryers, Instrument TCO No. 0707661, made on 03 August 2007, reduces the duty from the general rate of 5% to free duty.
The Act imposes several obligations on the parties involved. The applicant, in this case Electrolux Home Products Pty Limited, must ensure that their application is valid and meets the criteria set out in section 269C. The CEO, on the other hand, is required to publish a notice in the Gazette inviting submissions from any interested parties, as mandated by subsection 269K(1). If no submissions are received, the CEO proceeds to issue the TCO. Importers of the specified goods benefit from this process, as they can apply for a refund of duty paid on goods imported since the TCO came into effect under paragraph 126(1)(r) of the Regulations.
In terms of penalties and consequences, the Act does not explicitly state penalties for breaches directly related to the TCO process itself. However, general provisions under the Customs Act may apply for non-compliance with customs regulations. Any party found in breach of the customs laws could face civil or criminal penalties, including fines and imprisonment, depending on the severity and nature of the breach. The specific penalties would be determined based on the relevant sections of the Customs Act and other applicable legislation.