EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837715
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 household tools on 29 October 2008.
Instrument
TCO No 0837715 was made on 16 January 2009. It declares that those certain household tools 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. 0837715 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 was enacted by the Parliament of Australia to provide a comprehensive framework for the administration of customs and excise duties. Among its provisions, Part XVA establishes a scheme for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods under specific conditions. The purpose of this legislative framework is to facilitate trade by reducing the cost of importing goods that are not produced domestically, thereby encouraging competition and providing benefits to consumers. TCO No. 0837715, made under this scheme, was introduced to address the specific application by McPhersons Consumer Products Pty Ltd for tariff concessions on certain household tools. The instrument was enacted to provide these goods with a duty-free status, effective from the date of application on 29 October 2008, thereby aligning with the policy objective of reducing the duty on non-domestically produced goods that have no local substitutes.
Scope and Application
The Tariff Concession Instrument No. 0837715, made under Part XVA of the Customs Act 1901, applies to entities seeking tariff concessions on specific goods entering Australia. The instrument specifically pertains to the application made by McPhersons Consumer Products Pty Ltd for tariff concessions on certain household tools. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders, which provide for a lower rate of customs duty on specified goods if certain criteria are met. The Act applies to any entity or individual that applies for a tariff concession, and it is enforced nationally across Australia. The instrument does not apply to goods that are specified in section 269SJ of the Customs Act 1901, which includes certain strategic goods and those produced in Australia. The commencement date of the tariff concession is the date on which the application was lodged, 29 October 2008, and it does not affect any pre-existing rights or liabilities of parties other than the Commonwealth. The instrument is subject to further regulation under the Customs Tariff Act 1995 and the Customs Regulations 1998, which may provide additional details and conditions on the application of tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0837715, establish a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (s 269F). These orders apply a lower rate of customs duty to specified goods, provided the CEO determines that the application meets the core criteria (s 269C). The CEO is required to assess whether the goods in question can be substituted by products manufactured in Australia (s 269B and s 269D). If no substitutable goods are produced domestically, the CEO must issue a written TCO (s 269P(3)). In this specific case, the CEO issued TCO No. 0837715 for certain household tools, which are now subject to a duty rate of zero (s 269P(3), Tariff Schedule 4, item 50).
The obligations and requirements imposed by the Act on the parties involved include the necessity for McPhersons Consumer Products Pty Ltd to submit an application to the CEO for a TCO (s 269F). The CEO, upon receiving the application, must evaluate whether it meets the core criteria, specifically ensuring that no substitutable goods are being produced in Australia (s 269C). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be issued (s 269K(1)). In this instance, no submissions were received by the CEO in response to the published notice. The TCO also mandates that it does not retroactively affect the rights of any person other than the Commonwealth, ensuring that no new liabilities are imposed on individuals or entities (s 269S(1)).
The Act outlines specific offences, penalties, or civil/criminal consequences for non-compliance with its provisions. However, the Explanatory Statement does not detail specific penalties for breaches of the Customs Act 1901 as applied in this context. Generally, under Australian law, breaches of customs regulations can result in civil or criminal penalties, including fines and imprisonment, depending on the severity of the offence. The maximum penalties would be determined based on the specific nature of the breach and applicable legal provisions.
In summary, Tariff Concession Instrument No. 0837715, as per the Customs Act 1901, allows the CEO to issue TCOs for certain goods, provided they meet specific criteria and no substitutable goods are produced in Australia. The CEO's role involves assessing applications, publishing notices, and ensuring that the TCO does not disadvantage non-Commonwealth parties. While the specific penalties for breaches are not detailed in the Explanatory Statement, general Australian customs law includes potential fines and imprisonment for non-compliance.