EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712338
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.
Major Electrical Appliances applied for a TCO in respect of certain dishwashers on 1 August 2007.
Instrument
TCO No 0712338 was made on 12 October 2007. It declares that those certain dishwashers 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. 0712338 is taken to have come into force on 1 August 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, established a framework under which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. This legislative measure was introduced to address the problem of ensuring that certain goods, which are not produced domestically, are subject to reduced customs duties when imported. This helps in making such goods more affordable and accessible to consumers while also promoting competition within the market. The policy objective is to provide relief to consumers by reducing the cost of imported goods that do not have local alternatives, thereby facilitating trade and economic growth. Tariff Concession Instrument No. 0712338, made on 12 October 2007, is an example of such a concession applied to certain dishwashers, reducing their customs duty rate from 5% to 0%.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0712338, pertains to the application and establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to goods for which an application has been made, provided that the goods are not listed in section 269SJ of the Act, which excludes certain items from being subject to a TCO. The Act operates on a Commonwealth level and extends its application to any person or entity seeking a tariff concession for specific goods, ensuring that these goods are not substitutable by products manufactured within Australia and are not already in ordinary production domestically. Any application that meets the core criteria, as outlined in sections 269C and 269D of the Act, will result in the issuance of a TCO by the CEO, effectively reducing the customs duty on the specified goods. The application of this instrument is geographically confined to Australia, impacting importers who can benefit from the reduced duty rates and seek refunds for duties paid prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F of the Act outlines the process for applying for a TCO in respect of goods, provided the goods are not listed in section 269SJ, which specifies goods ineligible for a TCO. Section 269C stipulates that a TCO application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must issue a written order under section 269P(3) that declares the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the parties by the Act require that any person seeking a TCO for goods must ensure their application is valid and meets the criteria set out in sections 269C, 269D, and 269E. The CEO has the duty to evaluate the application, determine if it meets the core criteria, and if satisfied, make a written order declaring the applicable tariff concession. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO if they believe it should not proceed, as required by subsection 269K(1). In this instance, the CEO did not receive any submissions against the TCO.
Breach of the conditions set out in the Customs Act 1901 or failure to comply with the obligations and requirements could result in civil or criminal penalties. The maximum penalties for breaches are not explicitly stated in the explanatory statement but would typically be found within the Act itself or related legislation. Civil consequences may include fines or other monetary penalties, while criminal consequences might involve imprisonment, depending on the severity and intent behind the breach. It is important for all parties to adhere to the provisions of the Act to avoid these consequences.