EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051556
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 reverse cycle air conditioners on 23 November 2010.
Instrument
TCO No 1051556 was made on 28 February 2011. It declares that those certain reverse cycle air conditioners 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. 1051556 is taken to have come into force on 23 November 2010.
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, provides a framework for the regulation of customs and excise, including the application of customs duty. Specifically, Part XVA of the Act establishes the procedure for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain imported goods. This mechanism was introduced to address the need for flexible tariff regulation that can respond to specific economic or policy objectives, such as promoting competition, supporting industry development, or responding to market disruptions. The policy objective is to enable the Chief Executive Officer of Customs to grant tariff concessions that benefit the economy or specific industries by reducing the cost of imported goods, thereby supporting local industries or consumers.
The Tariff Concession Instrument No. 1051556, issued under the authority of the Customs Act 1901, provides a tariff concession for certain reverse cycle air conditioners, reducing their customs duty from the general rate of 5% to free. This concession was made following an application by Electrolux Home Products Pty Ltd, and the decision was based on the determination that no substitutable goods were produced in Australia. The instrument became effective on 23 November 2010, the date the application was lodged, and no submissions opposing the concession were received during the consultation period. This TCO aims to benefit importers by potentially allowing them to claim refunds for duties paid on the specified goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 1051556 under the Customs Act 1901 applies to specific reverse cycle air conditioners, as requested by Electrolux Home Products Pty Ltd. The instrument, which was approved and published on 28 February 2011, provides for a concession on customs duty for these goods. This applies to entities or individuals importing these specific air conditioners into Australia. The geographic reach of this Act is national, as it is administered under the Commonwealth. The Act excludes certain goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The application of the Act may be further defined or modified through subordinate instruments or regulations, which may include specific conditions or limitations on the tariff concession granted.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1051556 are contained within sections 269C, 269P, and 269SJ of the Customs Act 1901. Section 269C defines the core criteria that must be met for a Tariff Concession Order (TCO) to be issued by the Chief Executive Officer of Customs (CEO). The CEO must determine whether the application for a TCO meets the criteria on the day it is lodged, specifically ensuring that no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, Section 269P(3) mandates that the CEO must issue a written TCO, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269SJ, meanwhile, lists the types of goods that cannot be subject to a TCO, thereby excluding certain items from tariff concessions.
The Customs Act 1901 imposes several obligations on parties seeking a TCO. Firstly, applicants such as Electrolux Home Products Pty Ltd must ensure that their application is made in accordance with the Act and includes all necessary information to satisfy the CEO that the core criteria are met. This involves demonstrating that no substitutable goods were produced in Australia on the date the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from interested parties. The CEO must consider any submissions received and decide whether to proceed with issuing the TCO based on the merits of the application and any relevant submissions.
The Act also outlines the consequences for breaches and non-compliance. Although the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breaching the requirements of a TCO, it is reasonable to infer that general provisions within the Customs Act 1901 would apply. These could include fines or imprisonment for fraudulent applications or misrepresentations, as well as penalties for non-compliance with the conditions of the TCO once issued. The maximum penalties for such breaches would typically align with those stipulated in the broader customs legislation, which can include substantial fines and potential imprisonment for serious offences.
In summary, the Tariff Concession Instrument No. 1051556 facilitates the issuance of a TCO for specific goods, provided the core criteria are met and no substitutable goods are produced in Australia. The CEO's role includes evaluating applications, publishing notices for submissions, and ensuring that the TCO is issued correctly. While the explanatory statement does not specify penalties for breaches, it is reasonable to assume that penalties under the broader Customs Act 1901 would apply, including fines and imprisonment for serious violations.