EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837714
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 Pty Ltd applied for a TCO in respect of certain knitted polyester wash bags on 30 October 2008.
Instrument
TCO No 0837714 was made on 16 January 2009. It declares that those certain knitted polyester wash bags 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 7.5%. 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. 0837714 is taken to have come into force on 30 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 Tariff Concession Instrument No. 0837714 was enacted in 2009 under the Customs Act 1901 to address a specific gap in tariff concessions for certain goods. This instrument was introduced to provide relief to importers by reducing the customs duty on certain knitted polyester wash bags, which were not being produced in Australia at the time of application. The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who must determine if an application meets the core criteria, which include the absence of substitutable goods produced in Australia. In this instance, the CEO found that no such goods existed, thus approving the concession. The policy objective was to facilitate trade by lowering import costs, thereby benefiting importers who could apply for duty refunds on goods imported since the concession came into effect on 30 October 2008.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to reduce the customs duty on specific goods, provided these goods are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The application process requires that no substitutable goods, defined as those produced in Australia for a similar use, are being produced domestically when the application is made. If the core criteria are met, the CEO issues a written TCO, which applies to the goods from the date the application is lodged. The application of the TCO is national in scope and affects importers by potentially allowing them to claim a refund of duty on imports of the specified goods since the effective date of the TCO. The Act does not disadvantage any person other than the Commonwealth and imposes no new liabilities on any person.
The Act's application is limited by the exclusion of certain goods as specified in section 269SJ, and it extends to national borders, affecting all importers within Australia. The CEO's decision to grant a TCO is subject to consultation, as outlined in section 269K(1) of the Act, although no submissions were received in response to the notice published for TCO No 0837714. This particular TCO, effective from 30 October 2008, pertains to certain knitted polyester wash bags and reduces their duty from 7.5% to free, subject to the conditions and criteria stipulated in the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 0837714, issued under the Customs Act 1901, primarily operates through sections 269C, 269B, 269P, and 269K, among others. The legislation provides a framework for granting tariff concessions on specific goods, ensuring that a lower rate of customs duty applies if the Chief Executive Officer of Customs (CEO) determines that the goods in question are not being produced domestically and that the application meets the core criteria. Section 269C specifies that a tariff concession order (TCO) application meets the core criteria if no substitutable goods were produced in Australia at the time the application was lodged, as defined by sections 269B and 269D. If the CEO is satisfied that the application meets these criteria, they must make a written order specifying the prescribed tariff item under the Customs Tariff Act 1995 that applies to the goods in question. For instance, Instrument No. 0837714 applies to certain knitted polyester wash bags, granting them a tariff concession that reduces the duty rate from 7.5% to free.
The Customs Act 1901 imposes certain obligations on both applicants and the CEO. Applicants, such as McPhersons Consumer Products Pty Ltd, must ensure their applications are valid and meet the core criteria outlined in the Act. This includes demonstrating that the goods in question are not being produced in Australia and that no substitutable goods are being produced domestically. The CEO, on the other hand, must review the application, determine whether it meets the core criteria, and make a written order if it does. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted. In this case, no submissions were received in response to the notice published for Instrument No. 0837714.
Breach of the requirements set forth in the Customs Act 1901 could lead to various consequences. While specific offences and penalties are not detailed in the provided text, it is clear that any misrepresentation or failure to meet the core criteria could result in the rejection of a TCO application. For other breaches of the Customs Act, penalties can include fines and imprisonment, depending on the severity of the offence. The maximum penalties for customs-related offences can be substantial, reflecting the importance of compliance with customs regulations. Additionally, any person who imposes liabilities on others due to non-compliance with the Act could face legal action, although the specific civil or criminal consequences are not outlined in the text.