EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721916
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 applied for a TCO in respect of certain domestic ovens and or cooktops fans on 20 December 2007.
Instrument
TCO No 0721916 was made on 14 March 2008. It declares that those certain domestic ovens and or cooktops fans 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. 0721916 is taken to have come into force on 20 December 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. 0721916 was enacted in 2008 under the Customs Act 1901, providing a framework for granting tariff concessions to specific goods. This legislation was introduced to address the need for reduced customs duties on goods that are not produced domestically or are not substitutable by Australian-made products. The instrument facilitates applications from entities such as Electrolux Home Products for tariff concessions on certain items, in this case, domestic ovens and cooktop fans. The policy objective is to encourage the importation of goods that are not domestically produced, thereby supporting market competition and consumer choice. The instrument was enacted by the Chief Executive Officer of Customs, following the submission and acceptance of an application that met the core criteria outlined in the Customs Act.
This instrument was made following a process that included public consultation, where no objections were received to the granting of the tariff concession. The concession effectively reduces the duty on the specified goods from the general rate of 5% to free, and it applies retroactively to the date the application was lodged, ensuring that importers can claim refunds for duties paid on goods imported since that date. Importantly, the tariff concession does not impose any new liabilities on individuals or entities, nor does it disadvantage anyone by altering their rights as they stood on the date of the application.
Scope and Application
The Customs Act 1901 provides for the granting of Tariff Concession Orders (TCO) through which lower rates of customs duty apply to specified goods. This Act applies to any person or entity that imports goods into Australia and seeks to benefit from the reduced duty rates on those goods that are the subject of a TCO. The application of this Act is national, as it is a Commonwealth Act, and it extends across all states and territories of Australia. The Act provides for the Chief Executive Officer of Customs to assess applications for TCOs and determine if they meet the core criteria, which include the absence of substitutable goods produced in Australia. The instrument in question, TCO No. 0721916, specifically applies to certain domestic ovens and cooktop fans and was granted following an application by Electrolux Home Products. The application process involves publication in the Gazette to allow for public submissions, although in this instance, none were received. The TCO provides no disadvantage to existing rights and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
Section 269F of the Customs Act 1901 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 (Section 269C), they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any person who believes the TCO should not be made to lodge a submission. Once the CEO determines that the application meets the core criteria, the TCO comes into force on the day the application was lodged. For instance, TCO No. 0721916 was made on 14 March 2008, concerning certain domestic ovens and cooktop fans, and came into force on 20 December 2007.
The obligations under this Act for the parties involved are primarily focused on the application process and the CEO’s decision-making. The applicant must ensure that their application is valid and meets the criteria outlined in Section 269C. The CEO, upon accepting a valid application, must process it and make a decision based on the core criteria. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties. Should no submissions be received, the CEO proceeds to make the TCO. For instance, in the case of TCO No. 0721916, Electrolux Home Products applied for the concession, and the CEO made the order on 14 March 2008.
Failure to comply with the requirements set out in the Customs Act 1901 may result in legal consequences. The Act does not specify particular offences or penalties for non-compliance with the TCO process itself. However, the broader provisions of the Customs Act 1901 provide for various offences related to customs duties and related activities, with penalties that may include fines and imprisonment. For example, fraudulent or misleading statements in relation to customs duties can result in penalties under Section 225 of the Act, which includes fines up to $22,200 for individuals and significantly higher for corporations, alongside potential imprisonment terms. The TCO itself, once made, affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force, but does not impose any new liabilities on any person.