EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716092
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 25 September 2007.
Instrument
TCO No 0716092 was made on 13 March 2008. 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. One submission objecting to the TCO application was received from Fisher and Paykel Manufacturing Pty Ltd.
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. 0716092 is taken to have come into force on 25 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 Tariff Concession Instrument No. 0716092, enacted in 2008, is a legislative tool under the Customs Act 1901 that facilitates tariff concessions on specific goods. This instrument was introduced to address the need for reduced customs duties on certain imported goods, which could potentially stimulate trade and economic growth by making such goods more affordable. The Tariff Concession Orders (TCOs) under this Act allow for a lower rate of customs duty on goods specified in the order, provided they meet certain criteria, such as the absence of substitutable goods produced in Australia. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated to decide on the eligibility of applications for tariff concessions, thereby ensuring a streamlined process for businesses seeking such concessions.
The policy objective of this instrument is to support Australian businesses by lowering the cost of imported goods, which can lead to increased competitiveness and potentially boost economic activity. This is achieved through the application process outlined in the Customs Act, which allows for public submissions and ensures that the decision-making process is transparent and inclusive. The Tariff Concession Instrument No. 0716092 specifically pertains to refrigerators and was implemented to reduce the customs duty on these goods from the general rate of 5% to free, effective from the date the application was lodged, 25 September 2007.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the provisions for Tariff Concession Orders (TCOs) which can be issued by the Chief Executive Officer of Customs to provide a lower rate of customs duty on certain goods. These orders apply to entities or individuals who have applied for and met the criteria set forth in the Act, primarily focusing on the non-existence of substitutable goods produced in Australia at the time of application. The geographic scope of this Act is national, with its application extending across the Commonwealth of Australia. While the Act allows for broad application, it does exclude certain goods as specified in section 269SJ, which lists items ineligible for tariff concessions. Additionally, the Act may be further refined or extended through subordinate instruments, ensuring its application remains relevant and effective across various industries and economic conditions. This legislative framework facilitates trade by providing tariff relief where appropriate, balancing the interests of both producers and consumers within Australia.
Key Provisions
The primary sections of the Customs Act 1901 relevant to this Tariff Concession Order (TCO) include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply for a TCO if the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C outlines the core criteria for a TCO, which must be met by the Chief Executive Officer of Customs (CEO) to consider the application. Section 269P requires the CEO to make a written order if the application meets the core criteria, and section 269S stipulates that the TCO comes into effect on the day the application is lodged.
The obligations imposed on parties by this Act include ensuring that the goods subject to the TCO are not produced in Australia in the ordinary course of business, as defined in section 269E, and are not substitutable by goods produced in Australia, as defined in section 269D. The CEO is obligated to publish a notice in the Gazette inviting submissions on the TCO application, as per subsection 269K(1). Furthermore, the CEO must decide whether the application meets the core criteria within the parameters set out by the Act.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breaches of the TCO. However, it is clear that the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken before the registration date. This ensures that the implementation of the TCO does not retroactively impose liabilities on any party.