EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911117
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 Product applied for a TCO in respect of certain vacuum insulation panels on 01 April 2009.
Instrument
TCO No 0911117 was made on 19 June 2009. It declares that those certain vacuum insulation panels 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. 0911117 is taken to have come into force on 01 April 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 Customs Act 1901 was enacted by the Australian Parliament to provide for the regulation of customs and excise, including the imposition of duties and taxes on imported goods. The Tariff Concession Instrument No. 0911117, introduced on 19 June 2009, addresses the need for tariff concessions in specific circumstances where imported goods do not have Australian-made equivalents. This instrument facilitates the application process for tariff concessions by allowing the Chief Executive Officer of Customs to grant reduced or waived customs duties on certain imported goods, provided no substitutable goods are produced in Australia. The policy objective is to ensure fair trade practices by preventing the imposition of duties on imported goods for which there are no Australian alternatives, thus supporting industry competitiveness and consumer choice.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0911117, applies to the process by which certain goods can be granted tariff concessions by the Chief Executive Officer of Customs. Specifically, this Act allows for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO). The process involves an application by a person to the CEO, who must determine whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia. In the case of Electrolux Home Products, the CEO determined that the application for certain vacuum insulation panels met these criteria, resulting in the issuance of TCO No. 0911117 which grants a free rate of duty on these goods, effectively reducing the general rate of 5% to zero. The geographic reach of this Act is national, applying across Australia, and it is specific to the industries and entities involved in the importation of goods eligible for tariff concessions. The Act does not impose any liabilities on any person and protects the rights of importers by allowing them to apply for refunds of duty paid on these goods prior to the issuance of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0911117 include section 269C (269C), which specifies that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B (269B) defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Subsection 269P(3) (269P(3)) mandates that if the Chief Executive Officer (CEO) is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This instrument, TCO No. 0911117, was made on 19 June 2009, declaring that certain vacuum insulation panels are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person who wishes to apply for a TCO must ensure their application is lodged in accordance with section 269F (269F) and must not be in respect of goods specified in section 269SJ (269SJ). The CEO is required to decide whether the application meets the core criteria outlined in section 269C (269C) and, if satisfied, must make a written order as per section 269P(3) (269P(3)). Additionally, as per subsection 269K(1) (269K(1)), the CEO must publish a notice in the Gazette inviting submissions on the TCO application. Importers who meet the criteria can apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations (126(1)(r)).
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. Specifically, any person who fails to comply with the requirements for making a TCO application, or who provides false or misleading information, may face penalties. The maximum penalties for contravening the Customs Act 1901 can include fines and imprisonment. While the exact penalties are not specified in the Explanatory Statement, they can be severe, reflecting the seriousness with which the Act is enforced. The CEO is also tasked with ensuring that the TCO does not impose any liabilities on any person, thus protecting the rights of those who are not the Commonwealth.