EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711892
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.
Haier Australia Pty Ltd applied for a TCO in respect of certain refrigerators on 24 July 2007.
Instrument
TCO No 0711892 was made on 02 October 2007. It declares that those certain refrigerators 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. 0711892 is taken to have come into force on 24 July 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 was enacted to provide a comprehensive framework for the regulation of customs and excise, among other things. It was introduced to address the need for streamlined customs processes and to provide a clear legal basis for the administration of customs duties and tariffs. One particular innovation introduced by the Act was the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made, as outlined in Part XVA. This scheme allows for the reduction or exemption of customs duty on certain goods, provided certain criteria are met. The authority to make TCOs lies with the Chief Executive Officer of Customs, who must consider applications against specific core criteria, such as whether substitutable goods are produced in Australia. This legislative framework facilitates economic efficiency by potentially reducing costs for businesses importing specific goods, thereby encouraging trade and investment. The policy objective is to support industries by making certain imports more affordable, which can contribute to broader economic benefits.
Scope and Application
The Tariff Concession Instrument No. 0711892, made under Part XVA of the Customs Act 1901, applies to specific goods, in this instance certain refrigerators, for which Haier Australia Pty Ltd applied for tariff concessions. The Act allows for the reduction or exemption of customs duty on goods not produced in Australia in the ordinary course of business, provided the application meets the core criteria specified in section 269C of the Act. This legislation operates at the Commonwealth level and applies to entities seeking tariff concessions on imported goods. The application process requires the Chief Executive Officer of Customs to evaluate whether the goods in question are substitutable by Australian-made products and, if not, to grant a Tariff Concession Order (TCO). The TCO, once issued, reduces the customs duty rate to zero, from the general rate of 5% applicable to the specified goods. The instrument took effect on the date of application, 24 July 2007, and does not retroactively affect any pre-existing rights or liabilities of non-Commonwealth entities.
Key Provisions
The primary operative sections of this legislation concern the making of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs for a TCO in respect of specific goods. If the application is deemed valid and does not pertain to goods specified in section 269SJ, the CEO must then determine whether the application meets the core criteria as outlined in section 269C. If the application satisfies these criteria, the CEO must issue a written order (a TCO) as stated in section 269P(3). This process was followed in the case of Haier Australia Pty Ltd's application for certain refrigerators, leading to TCO No. 0711892, which declared these refrigerators to be subject to a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on both applicants and the CEO. For applicants, the key requirement is to ensure that the application for a TCO is valid and pertains to goods not specified in section 269SJ. The CEO, on the other hand, must promptly assess the application to determine if it meets the core criteria and, if so, issue a TCO. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made. In this instance, no submissions were received in response to the notice.
The Act also delineates consequences for non-compliance, although the specific provisions are not detailed in this explanatory statement. Generally, under Australian legislation, breaches can result in various civil or criminal penalties depending on the severity and intent behind the breach. For instance, individuals or entities that knowingly provide false information in an application could face fines or other legal repercussions. However, the specific penalties are not outlined in this explanatory statement, and one would need to refer to the broader legislative framework for detailed information on penalties and enforcement mechanisms.