EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716025
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 electric heater box elements on 21 Septemeber 2007.
Instrument
TCO No 0716025 was made on 07 December 2007. It declares that those certain electric heater box elements 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. 0716025 is taken to have come into force on 21 September 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 regulate the importation and exportation of goods into and out of Australia, providing the legal framework for the administration of customs and excise duties. The Tariff Concession Instrument No. 0716025 was introduced in 2007 to address a specific gap in the application process for tariff concessions, ensuring that certain goods, in this case, electric heater box elements, can benefit from reduced customs duty rates when no substitutable goods are produced domestically. The instrument was made under the authority of the Chief Executive Officer of Customs, who must determine whether an application for a Tariff Concession Order meets the core criteria set out in the Customs Act, specifically that no substitutable goods were produced in Australia. The Tariff Concession Instrument No. 0716025 was introduced without any submissions opposing the concession, indicating a consensus on the need for the tariff reduction for these specific goods.
Scope and Application
The Tariff Concession Instrument No. 0716025, made under the Customs Act 1901, applies to certain electric heater box elements specified in the instrument. This instrument was created in response to an application by Electrolux Home Products Pty Limited on 21 September 2007, and it came into force on the same day. The instrument is applicable to any entity importing these specific goods into Australia, thereby benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date. The instrument does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken prior to its registration. The geographic and jurisdictional reach of this Act is national, as it pertains to the importation of goods within Australia and is governed under Commonwealth law. There are no exclusions or exemptions specified within this particular instrument, and its application is not extended or restricted through subordinate instruments.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0716025, made under the Customs Act 1901, primarily involve the granting of tariff concessions for certain electric heater box elements. According to section 269F, an application can be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria under section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For these specific electric heater box elements, the TCO applies item 50 of Schedule 4, resulting in a tariff rate of free instead of the general rate of 5%.
The obligations imposed by the Act on the parties involved are significant. The CEO of Customs must ensure that any TCO application is reviewed against the core criteria specified in section 269C. This involves confirming that no substitutable goods were produced in Australia in the ordinary course of business on the application date. Additionally, as per section 269K(1), the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO being made. Although no submissions were received in response to this particular TCO, the process ensures transparency and opportunity for stakeholder input.
In terms of compliance, the Act stipulates various consequences for breaches. Under section 269SJ, certain goods are explicitly excluded from being subject to a TCO, indicating that applications in respect of these goods are not valid. Any failure to adhere to the requirements set out in the Act, such as incorrectly applying for a TCO for ineligible goods, could result in the application being rejected. While the specific penalties for breaches are not detailed in the explanatory statement, breaches of the Customs Act 1901 generally carry significant civil and criminal penalties, including fines and imprisonment, depending on the severity of the breach. These penalties are designed to ensure strict compliance with the legislative framework governing customs duties and tariff concessions.