EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718597
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 cooling assemblies on 31 October 2007.
Instrument
TCO No 0718597 was made on 25 January 2008. It declares that those certain refrigerator cooling assemblies 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. 0718597 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0718597 was enacted in 2008 under the Customs Act 1901 to address the issue of tariff concessions for certain imported goods. The Act, enacted by the Australian Parliament, established a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs. This mechanism allows for a lower rate of customs duty on goods specified in a TCO. Electrolux Home Products Pty Limited applied for a TCO for certain refrigerator cooling assemblies, which was subsequently granted by the CEO of Customs, effective from 31 October 2007. The policy objective behind this legislation is to provide relief to importers by reducing the customs duty on specified goods, thereby potentially lowering costs and increasing competitiveness in the market.
Scope and Application
The Tariff Concession Instrument No. 0718597, made under the Customs Act 1901, applies to specific goods identified by Electrolux Home Products Pty Limited, namely certain refrigerator cooling assemblies. This legislation allows for a lower rate of customs duty for these goods, with the general rate of duty being reduced from 5% to free, provided the goods meet the core criteria set out in the Act. The primary focus of the Act is on goods that are not produced in Australia and for which there are no substitutable goods produced domestically. The Act ensures that a Tariff Concession Order (TCO) can be granted if the Chief Executive Officer of Customs (CEO) is satisfied that no substitutable goods were produced in Australia at the time the application was lodged. The scope of this legislation is limited to the goods specified in the application and does not extend to other goods unless similarly applied for and approved. The geographic reach of this legislation is national, applying throughout Australia. Importantly, the TCO does not affect the rights of any person as at the date of registration, thus avoiding any disadvantage or imposition of liabilities on persons other than the Commonwealth in respect of actions taken prior to the registration date. The rights of importers are, however, beneficially affected as they can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0718597, under the Customs Act 1901, include sections 269F, 269C, 269B, 269D, 269E, 269P(3), and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, as stipulated in section 269C, a TCO can be made. The core criteria are defined in sections 269B and 269D, with section 269E explaining the meaning of "ordinary course of business" and section 269P(3) detailing the process for making a written TCO order.
The obligations imposed by the Act on the parties and entities it governs include the requirement for the CEO to ensure that any TCO application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must also verify that no substitutable goods are produced in Australia on the day the application is lodged. Furthermore, section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this case, no submissions were received. Once a TCO is made, it is considered to have come into force on the day the application was lodged, as outlined in section 269S(1).
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach in relation to TCOs. However, the implications of not adhering to the requirements set out in the Act could include the potential for the TCO to be invalidated, resulting in the affected goods reverting to the standard customs duty rates. Additionally, any failure to comply with the terms of a TCO could lead to administrative or legal repercussions for the party responsible, although the specific consequences are not detailed in the Act itself.