EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909985
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 Ltd applied for a TCO in respect of certain cooling assemblies on 25 March 2009.
Instrument
TCO No 0909985 was made on 05 June 2009. It declares that those certain 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. 0909985 is taken to have come into force on 25 March 2009.
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. 0909985 was enacted in 2009 as a measure under the Customs Act 1901. This legislation aims to provide relief from customs duty for certain goods, specifically addressing instances where no substitutable goods are produced in Australia in the ordinary course of business. Administered by the Chief Executive Officer of Customs, the Instrument facilitates tariff concessions by declaring particular goods to which a prescribed tariff applies, thus reducing their duty rates. This was enacted to foster trade efficiency by lowering import costs for specific items, such as the cooling assemblies for which Electrolux Home Products Pty Ltd applied.
The instrument was introduced to ensure that the Australian market remains competitive without unduly burdening businesses with high import tariffs. The policy objective aligns with facilitating smoother trade operations and economic growth by making essential goods more affordable. This initiative underscores the government's commitment to supporting industries by reducing the financial barriers associated with importing specific goods. The Customs Act 1901, through its provisions for tariff concessions, seeks to balance the need for revenue generation with the imperative of promoting economic activity and consumer access to a diverse range of goods.
Scope and Application
The Tariff Concession Instrument No. 0909985 under the Customs Act 1901 applies specifically to applications for Tariff Concession Orders (TCOs) regarding particular goods, where the application is made by a person to the Chief Executive Officer of Customs. The legislation allows for a lower rate of customs duty to be applied to goods specified in a TCO if certain criteria are met. This involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business as of the date the application was lodged. The application process includes a mandatory publication in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. The TCO itself has retroactive effect from the date the application was made, meaning it applies from the date of the application, although it does not affect the rights of any person other than the Commonwealth in relation to actions taken before the TCO's registration. This instrument is an example of how the Customs Act facilitates tariff concessions, benefiting importers by potentially reducing duty on specified goods.
Key Provisions
The primary operative sections of this legislation, specifically section 269C and subsection 269P(3) of the Customs Act 1901, establish the framework for the creation of Tariff Concession Orders (TCOs). Section 269C outlines the core criteria for TCO applications, which must meet the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Upon meeting these criteria, subsection 269P(3) mandates that the Chief Executive Officer of Customs (CEO) must issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a tariff concession.
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269F allows a person to apply to the CEO for a TCO in respect of goods. The CEO is then required to assess whether the application meets the core criteria stipulated in section 269C. If satisfied, the CEO must proceed to issue a TCO as outlined in subsection 269P(3). Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO's duty to publish this notice ensures transparency and allows for potential objections to be raised.
In terms of offences, penalties, or consequences, the Act does not explicitly state penalties for non-compliance with TCOs. However, any breaches of the Customs Act 1901 or related regulations could lead to civil or criminal consequences. For instance, wilful or negligent breaches of the Customs Act could result in substantial fines or imprisonment. The specifics of such penalties are detailed in the relevant sections of the Customs Act and the Customs Regulations 1993, which can impose significant financial penalties and imprisonment for offences such as fraudulent importation or failure to comply with customs requirements.
Additionally, although the TCO itself does not impose any new liabilities, it may entitle importers to apply for refunds of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, preserving the legal status quo prior to the TCO's implementation.