EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119510
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 applied for a TCO in respect of certain control panels on 17 June 2011.
Instrument
TCO No 1119510 was made on 05 September 2011. It declares that those certain control 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. 1119510 is taken to have come into force on 17 June 2011.
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 Parliament of Australia, established a framework within which Tariff Concession Orders (TCOs) can be implemented, facilitating reduced customs duty rates for specified goods. This Act allows for the application of lower duty rates to goods that are subject to a TCO, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The primary objective of the Act in this context is to encourage trade and economic efficiency by potentially reducing the cost burden on businesses that import goods covered by TCOs. In response to an application from Electrolux Home Products on 17 June 2011, the Chief Executive Officer of Customs issued TCO No. 1119510 on 5 September 2011, declaring that certain control panels are subject to the TCO, resulting in a duty rate of free, down from the general rate of 5%. This measure was designed to support the importation of these goods without imposing any additional liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce customs duty rates on specified goods, provided the application meets the core criteria set out in the Act. A TCO can be applied for by any person, and the CEO is required to make a written order if the application is deemed valid, which means that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. In this context, substitutable goods refer to those produced in Australia that can be used in the same way as the goods for which the tariff concession is being sought. The Act ensures that the TCO does not disadvantage any person by affecting their rights as of the date of registration or imposing liabilities for actions taken prior to the registration date. The TCO No. 1119510, for example, applies to certain control panels, reducing their duty rate from the general rate of 5% to free, and was effective from the date the application was lodged, 17 June 2011. This legislative framework allows for the dynamic adjustment of customs duties to support economic and trade policy objectives.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C sets out the core criteria that must be met for a TCO application to be considered, including that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must make a written order (a TCO) under section 269P, which declares that the goods in question are to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. Finally, under section 269S, a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes several obligations on the parties involved. Firstly, any person who wishes to apply for a TCO must do so under section 269F and must ensure that their application meets the core criteria set out in section 269C. The CEO, on receiving an application, must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. If no submissions are received, the CEO must make a TCO if the application meets the criteria. Additionally, the TCO must be registered, and the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
There are no explicit offences, penalties, or civil/criminal consequences mentioned for breach of this legislation within the provided text. However, the importance of ensuring that applications for TCOs meet the specified criteria cannot be understated. Failure to meet these criteria could result in the CEO declining to make a TCO, which could negatively impact the applicant’s business operations by not providing the intended tariff concession. Additionally, if a TCO is made in error, there may be implications for the proper administration of customs duties and potential liabilities for incorrect duty payments or refunds.