EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716714
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 refrigerator door hinges on 03 October 2007.
Instrument
TCO No 0716714 was made on 14 December 2007. It declares that those certain refrigerator door hinges 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. 0716714 is taken to have come into force on 03 October 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 Commonwealth Parliament, established a framework for the imposition of customs duties and the regulation of imports and exports in Australia. A significant component of this Act is Part XVA, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for reduced customs duty rates on specified goods, provided they meet certain criteria. The problem this legislative framework addresses is the need for a flexible mechanism to reduce customs duties on particular goods, fostering trade and economic efficiency by lowering the cost of imported goods that do not have local substitutes. The policy objective, as outlined in the Act, is to ensure that the application of tariff concessions does not disadvantage local producers by ensuring that no substitutable goods are produced in Australia at the time of the application. This approach aims to balance the interests of importers and local industries by selectively lowering tariffs where it is safe to do so without undermining domestic production.
Scope and Application
The Tariff Concession Instrument No. 0716714 under the Customs Act 1901 applies to certain refrigerator door hinges as specified by Electrolux Home Products Pty Limited. The instrument is pertinent to the entity that applied for the tariff concession and to the broader industry involved in the importation of these specific goods. It operates within the jurisdictional reach of the Commonwealth of Australia, overseen by the Chief Executive Officer of Customs who has the authority to make Tariff Concession Orders (TCOs). The Act mandates that a TCO application meets core criteria if, at the time of application, no substitutable goods were produced in Australia in the ordinary course of business. The TCO itself exempts these refrigerator door hinges from the general rate of duty, setting the duty rate at free instead of the usual 5%. Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken prior to its effective date, which is 03 October 2007, the date the application was lodged. This legislative instrument, therefore, offers tariff relief to importers of the specified goods, potentially entitling them to duty refunds for imports made since the effective date.
Key Provisions
The Tariff Concession Instrument No. 0716714, made under section 269F of the Customs Act 1901, provides for tariff concessions for certain refrigerator door hinges, as applied for by Electrolux Home Products Pty Limited on 03 October 2007 (sections 269F, 269C). The Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, satisfying the core criteria for a Tariff Concession Order (TCO) (section 269C). Consequently, the CEO issued TCO No. 0716714 on 14 December 2007, declaring that the specific refrigerator door hinges are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a resulting duty rate of free, as opposed to the general rate of 5% (sections 269P(3), 269K(1)).
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. In this instance, no submissions were received in response to the published notice. Secondly, under section 269S(1), a TCO is taken to have come into force on the day on which the application for the TCO was lodged, meaning TCO No. 0716714 is effective from 03 October 2007. Additionally, section 269SJ specifies that certain goods cannot be subject to a TCO, although the application in this case did not involve such goods.
In terms of potential consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, general provisions in the Act may apply where there is non-compliance with customs regulations, which could result in penalties such as fines or imprisonment. For example, section 244 of the Act provides that a person who knowingly or recklessly makes a false or misleading statement in connection with customs matters is liable to a penalty. The maximum penalties for such offences can be found in the Crimes Act 1914, which may include substantial fines and/or imprisonment depending on the severity of the offence.