EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808661
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.
Mcpherson's Consumer Products Pty Ltd applied for a TCO in respect of certain cosmetic applicators on 16 May 2008.
Instrument
TCO No 0808661 was made on 25 July 2008. It declares that those certain cosmetic applicators 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. 0808661 is taken to have come into force on 16 May 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 Tariff Concession Instrument No. 0808661 was enacted in 2008 as an instrument under the Customs Act 1901. The primary purpose of this legislation is to facilitate the granting of tariff concession orders (TCOs) by the Chief Executive Officer of Customs. Such orders allow for a reduced rate of customs duty on specified goods, provided certain criteria are met. Specifically, the Act aims to ensure that a TCO can be applied to goods for which no substitutable goods are produced in Australia, thereby promoting trade and economic efficiency. The instrument was introduced to address the need for streamlined processes in reducing customs duties on specific goods, enhancing the accessibility and affordability of these goods in the Australian market.
The enacting body for this instrument is the Chief Executive Officer of Customs, who has the authority to make TCOs under section 269F of the Customs Act 1901. The policy objective behind this legislation is to encourage the importation of goods by reducing their customs duty rates, provided that the goods are not already being produced in Australia. This approach aims to foster competitive markets and benefit consumers by making goods more affordable. The instrument was developed following an application by McPherson's Consumer Products Pty Ltd for tariff concessions on certain cosmetic applicators, leading to the establishment of a free duty rate for these goods.
Scope and Application
The Tariff Concession Instrument No. 0808661, pursuant to the Customs Act 1901, applies to goods specified in the instrument, in this case certain cosmetic applicators. The application of this instrument is directed towards individuals or entities seeking tariff concessions for goods that meet specific criteria, ensuring they are not substitutable by goods produced in Australia in the ordinary course of business. This instrument is significant for businesses importing these goods, as it provides them with a lower rate of customs duty, thereby affecting their import costs and pricing strategies. The geographical reach of this legislation is national, given that it falls under the Commonwealth jurisdiction and applies across Australia. The instrument does not impose any liabilities on individuals or entities, nor does it disadvantage anyone by affecting their rights as at the date of registration. However, it does not include exclusions or exemptions beyond those specified in the Customs Act 1901, such as goods listed in section 269SJ, which cannot be subject to a TCO. The application of this instrument may be extended or restricted through subordinate instruments, aligning with the overarching objectives and regulatory framework set by the Customs Act 1901.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P(3), and 269S. Section 269C stipulates 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 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, the CEO must issue a written order declaring the goods to which the order applies. Section 269S outlines the commencement of a TCO, specifying that it comes into force on the day the application is lodged.
The Act imposes certain obligations and requirements on the parties involved. For instance, Section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes the TCO should not be made to submit their reasons to the CEO. Additionally, under Section 269B, the CEO must ensure that the application for a TCO does not pertain to goods specified in Section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must also verify that no substitutable goods were produced in Australia on the day the application was lodged.
In terms of offences and penalties, the Customs Act 1901 does not explicitly outline specific criminal or civil penalties for breaches related to the issuance of a TCO. However, general provisions in the Act may apply to any unlawful activities related to the import or export of goods, including fines and imprisonment for serious offences. For example, under Section 139 of the Act, a person who knowingly makes a false statement or representation in connection with the importation or exportation of goods may be liable to a penalty of up to 10,000 penalty units or imprisonment for up to two years, or both.
The explanatory statement clarifies that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration to the extent that it would disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration. Importers of the affected goods will benefit from the TCO, as they may apply for a refund of duty on goods imported since the day the TCO came into force under paragraph 126(1)(r) of the Regulations. It is important to note that the TCO does not impose any liabilities on any person.