EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802940
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 oven and or griller parts on 20 February 2008.
Instrument
TCO No 0802940 was made on 09 May 2008. It declares that those certain oven and or griller parts 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. 0802940 is taken to have come into force on 20 February 2008.
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 facilitate the administration of customs duties and provides a framework for tariff concession orders to reduce or eliminate duty on certain imported goods. This legislation was introduced to address the need for streamlined processes to allow businesses to access imported goods more cost-effectively where no suitable Australian-produced alternatives exist. The Parliament of Australia established this mechanism through which the Chief Executive Officer of Customs can make Tariff Concession Orders, as outlined in section 269F. The policy objective of these concessions is to support industries by reducing the cost of imported goods, thereby fostering economic growth and competitiveness. Tariff Concession Instrument No. 0802940, made under this Act, provides a tariff concession for specific oven and griller parts, illustrating the Act’s application in enabling duty-free importation of goods where no suitable Australian-made equivalents are available.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on certain goods, as determined by the Chief Executive Officer of Customs (CEO). This legislation applies to any individual or entity that may apply for a TCO in respect of goods, provided that such goods are not specified as ineligible under section 269SJ of the Act. The application must meet the core criteria as outlined in sections 269C, 269B, and 269D of the Act, which essentially require that no substitutable goods are produced in Australia in the ordinary course of business. The geographic and jurisdictional reach of this Act is national, as it pertains to the Customs operations across Australia. The Act does not specify exclusions or exemptions beyond those mentioned, and it is the CEO who has the authority to decide on the eligibility of an application. The scope of the Act can be extended or restricted through subordinate instruments, though this specific Explanatory Statement does not elaborate on any such instruments. The rights of importers are positively affected by the TCOs, with potential for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0802940 include sections 269C, 269B, 269D, 269E, 269P(3), and 269K(1) of the Customs Act 1901. These sections outline the criteria for making a Tariff Concession Order (TCO) and the process for its implementation. Section 269C sets the core criteria for a TCO, stating that no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269B, 269D, and 269E. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to make a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The Act imposes several obligations and requirements on the parties involved. For the applicant, Electrolux Home Products Pty Limited, the obligation is to ensure their TCO application meets the core criteria, particularly that no substitutable goods were produced in Australia on the application date. For the CEO, the obligations include evaluating the application against the core criteria, making a written order if the criteria are met, and publishing a notice in the Gazette inviting submissions from the public. The CEO's duty to assess the application and ensure no substitutable goods are produced in Australia is critical to the process. Moreover, the CEO must ensure that any TCO made does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the TCO's registration.
Breaches of the provisions in the Customs Act 1901 can result in civil and criminal consequences. Under the Act, individuals or entities that fail to comply with the requirements for TCO applications may face penalties. For instance, providing false information in an application could be considered an offence under section 269Z of the Act, which carries potential fines and imprisonment. Although the explanatory statement does not specify maximum penalties, the Act generally provides for substantial fines and imprisonment terms for serious breaches. The consequences for non-compliance can include financial penalties and legal actions against the defaulting party. The specific penalties would depend on the nature and severity of the breach, as well as the provisions of the Customs Act 1901 and any related regulations.