EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803431
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 clothes dryers on 3 March 2008.
Instrument
TCO No 0803431 was made on 9 May 2008. It declares that those certain clothes dryers 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. 0803431 is taken to have come into force on 3 March 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 by the Parliament of Australia to provide a comprehensive framework for the regulation of customs and excise duties, among other things. A notable aspect of the Act is its inclusion of Part XVA, which introduces a scheme for Tariff Concession Orders (TCOs). These orders allow for the application of lower rates of customs duty on certain goods, subject to specific criteria. Enacted to address gaps in tariff regulation by providing flexibility in duty applications, this part of the Act aims to facilitate trade by reducing the financial burden on importers under certain conditions. The policy objective behind TCOs is to ensure that Australian businesses remain competitive in the global market by potentially lowering the cost of imported goods, provided no substitutable goods are produced domestically. The CEO of Customs is entrusted with the responsibility of deciding on TCO applications, ensuring that they align with the legislative criteria.
Scope and Application
The Tariff Concession Instrument No. 0803431 applies to the specific goods for which Haier Australia Pty Ltd applied, namely certain clothes dryers, and it is enacted under the Customs Act 1901. This Act applies to individuals or entities seeking tariff concessions for goods that are not currently being produced in Australia and for which no substitutable goods are being produced in the ordinary course of business. The geographic reach of this legislation is national, as it operates under the Commonwealth jurisdiction of Australia. The exclusions specified in section 269SJ of the Act apply, meaning that certain goods are not eligible for tariff concessions, such as those that might be deemed strategic or those which could affect national security. The application of the Act may be further extended or restricted through subordinate instruments, such as regulations, which provide additional definitions and procedural requirements. The commencement date for this specific TCO is the date the application was lodged, 3 March 2008, and it does not affect any rights or liabilities accrued before this date.
Key Provisions
The key operative sections of this legislation (Customs Act 1901) involve the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). An application for a TCO can be submitted by any person in respect of goods (section 269F). However, the CEO must ensure that the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the application is valid, the CEO must decide if it meets the core criteria outlined in section 269C of the Act, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P(3) of the Act, respectively.
The Act imposes several obligations and requirements on the parties involved. 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 (subsection 269K(1) of the Act). In this case, the CEO did not receive any submissions in response to this invitation. 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 (subsection 269P(3) of the Act). The TCO must be made in writing and specify the prescribed item of Schedule 4 to the Tariff that applies to the goods.
The legislation outlines potential offences, penalties, or civil/criminal consequences for breach, although specific penalties are not stated in the text. If an entity fails to comply with the obligations and requirements set out in the Customs Act 1901, it may be subject to enforcement action by the CEO. This could include fines, penalties, or other legal consequences as determined by the CEO or relevant authorities. The CEO may also have the authority to investigate and take action against entities that do not comply with the provisions of the Customs Act 1901. It is essential for entities governed by this legislation to ensure they understand and adhere to the requirements to avoid potential penalties or legal consequences.