EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826313
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.
Stoddart Food Service Equipment Pty Ltd applied for a TCO in respect of certain induction cooktops on 13 August 2008.
Instrument
TCO No 0826313 was made on 07 November 2008. It declares that those certain induction cooktops 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. 0826313 is taken to have come into force on 13 August 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, enacted by the Australian Parliament, serves as the foundational legislation for managing the customs and excise tariffs within Australia. This Act provides a framework for the imposition of duties on imported goods, as well as mechanisms for granting tariff concessions. Specifically, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the duty rates on certain imported goods. The introduction of TCOs aims to address the gap in providing relief to industries that cannot compete with domestically produced goods, thereby encouraging the import of goods that are not produced in Australia. Tariff Concession Instrument No. 0826313, made under the authority of the Customs Act, exemplifies this mechanism by offering tariff concessions for certain induction cooktops, reducing the duty rate from the general rate of 5% to free, effective from the date the application was lodged. The policy objective is to foster industry competitiveness and consumer choice by making imported goods more affordable.
Scope and Application
The Tariff Concession Instrument No. 0826313 under the Customs Act 1901 applies to the concession of customs duty on specific goods, namely certain induction cooktops. This instrument is applicable to any person or entity that imports these goods into Australia, provided they meet the criteria outlined in the Act. The instrument extends to the Commonwealth jurisdiction, impacting the customs duties levied on these specified goods. The instrument was enacted to ensure that no substitutable goods were produced in Australia at the time of application, thereby qualifying the goods for tariff concessions. Notably, the instrument does not apply to goods listed in section 269SJ of the Act, which explicitly excludes certain goods from tariff concessions. The instrument’s application can be further refined or extended through subordinate instruments, which may specify additional details or conditions. The instrument's commencement date aligns with the date of the application, ensuring that any duties payable from that date onwards are subject to the tariff concession.
Key Provisions
The main operative sections of this legislation concern the making of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F of the Act allows for a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods do not fall under the restricted categories outlined in section 269SJ. If the application meets the core criteria, as specified in sections 269C, 269B, and 269E, the CEO must make a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. This instrument, TCO No. 0826313, was made on 07 November 2008, and it applies to certain induction cooktops, which are now subject to a free rate of duty under item 50 of Schedule 4 to the Tariff.
This Act imposes several obligations and requirements on the parties involved. The CEO of Customs is required to determine whether an application for a TCO meets the core criteria and, if it does, to make a written order declaring that the goods are subject to the specified tariff concession. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made. Additionally, the Act mandates that a TCO is taken to have come into force on the day the application for the TCO was lodged. In the case of TCO No. 0826313, this date is 13 August 2008. Importantly, the TCO does not affect the rights of any person, except to the benefit of importers who can apply for a refund of duty on goods imported since the TCO came into force.
The legislation outlines several potential consequences for breach. If a TCO is made in error or if there is non-compliance with the conditions set out in the TCO, this could lead to various civil and criminal penalties. While the specific penalties are not detailed in the explanatory statement, under the broader Customs Act 1901, breaches can result in fines and even imprisonment. For instance, knowingly making a false statement in an application for a TCO could lead to a fine of up to $22,200 for an individual or $111,000 for a corporation, along with potential imprisonment. These penalties underscore the importance of adhering to the requirements set out in the Act and the TCOs made under it.