EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837711
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.
Mcphersons Consumer Products applied for a TCO in respect of certain grooming sets on 29 October 2008.
Instrument
TCO No 0837711 was made on 16 January 2009. It declares that those certain grooming sets 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. 0837711 is taken to have come into force on 29 October 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 Customs Act 1901, enacted by the Parliament of Australia, includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0837711, enacted in 2009, addresses the problem of ensuring that Australian businesses can access necessary imported goods at a reduced customs duty rate, promoting competitiveness and economic efficiency. This instrument declares that certain grooming sets, for which McPhersons Consumer Products applied, are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, provided no substitutable goods are produced in Australia. The policy objective is to facilitate the import of these specific goods without financial barriers, thus benefiting importers and potentially the broader market by lowering the cost of these products.
Scope and Application
The Customs Act 1901 applies to individuals and entities engaged in the importation of goods into Australia, specifically in the context of Tariff Concession Orders (TCOs) under Part XVA. The Act provides a framework for the Chief Executive Officer of Customs to consider and make orders that allow for reduced customs duty on specific goods, provided that these goods are not produced in Australia in the ordinary course of business and do not have substitutable goods already being manufactured domestically. The scope of this legislation is national, as it is administered by the Commonwealth, and it applies to any person or entity seeking a tariff concession for imported goods. There are explicit exclusions under section 269SJ of the Act, which outlines goods that cannot be the subject of a TCO. The Act allows for the expansion and specification of these exclusions through subordinate instruments, such as the Customs Tariff Act 1995, which further details the tariff items and rates applicable to various goods. The TCO itself, such as Instrument No. 0837711, specifies the particular goods that benefit from tariff concessions and outlines the effective date of such concessions, which is the date the application was lodged.
Key Provisions
The Tariff Concession Instrument No. 0837711, made under the Customs Act 1901, allows for a reduced rate of customs duty on certain grooming sets, which are now subject to a free rate as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (paragraph 4). This concession was granted after McPhersons Consumer Products successfully applied for a Tariff Concession Order (TCO) on 29 October 2008. The Chief Executive Officer of Customs (CEO) was satisfied that the application met the core criteria, specifically that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). This decision was made in accordance with section 269P(3) of the Customs Act, which mandates the CEO to issue a written TCO order if the application meets these criteria.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure that their application is made in good faith and that all relevant information is provided (section 269F). The CEO is required to assess the application against the core criteria and make a decision within a reasonable timeframe (section 269C). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)). In this case, no submissions were received, allowing the CEO to proceed with the TCO without further delay (paragraph 6).
Breaching the conditions of a TCO or failing to comply with the obligations outlined in the Customs Act could lead to various consequences. While the explanatory statement does not detail specific offences or penalties, the Act generally provides for civil and criminal penalties for non-compliance with customs regulations. These penalties can include fines and imprisonment, depending on the severity of the breach. The maximum penalties are not specified in the explanatory statement, but they would be outlined in the relevant sections of the Customs Act and associated regulations. It is important for entities and individuals involved in the importation of these goods to adhere strictly to the terms of the TCO to avoid any potential legal repercussions.