EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837716
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 stainless steel kitchenware on 29 October 2008.
Instrument
TCO No 0837716 was made on 23 January 2009. It declares that those certain stainless steel kitchenware 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. 0837716 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 to regulate the importation and exportation of goods in Australia, including the imposition and collection of customs duty. The Tariff Concession Instrument No. 0837716 was introduced to provide tariff concessions on certain goods, aiming to reduce the customs duty on specific items, thereby potentially lowering costs for consumers and businesses. This instrument was enacted by the Chief Executive Officer of Customs, following the application by McPhersons Consumer Products for tariff concessions on certain stainless steel kitchenware. The policy objective behind this concession is to support Australian businesses by reducing the cost of imported goods that do not have locally produced substitutes, thereby potentially enhancing competitiveness and consumer choice. The instrument came into effect on 29 October 2008, the date the application was lodged, and no submissions were received opposing the concession, indicating a lack of public dissent against the tariff reduction for these goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders provide for a lower rate of customs duty on specified goods, contingent upon the CEO being satisfied that the application meets the core criteria and that no substitutable goods are produced in Australia in the ordinary course of business. The application process requires the applicant to demonstrate that the goods for which the TCO is sought are not among those specified in section 269SJ of the Act, which excludes certain goods from eligibility for tariff concessions. Once the application is deemed to meet the core criteria, the CEO is mandated to issue a written TCO. The TCO, upon issuance, applies retroactively to the date of the application, as stipulated by the Act, and ensures that no existing rights or liabilities of parties other than the Commonwealth are adversely affected by the concession. This mechanism is designed to benefit importers by potentially allowing them to apply for duty refunds on goods imported since the effective date of the TCO. The Act's jurisdictional reach is Commonwealth-wide, with the authority to issue TCOs vested in the CEO.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for specific goods, which are subject to a lower rate of customs duty. McPhersons Consumer Products applied for a TCO for certain stainless steel kitchenware, which was subsequently approved by the CEO and registered as TCO No. 0837716 on 23 January 2009. This order was based on the CEO's satisfaction that no substitutable goods were produced in Australia at the time of application, as required by section 269C. The TCO declares that the mentioned stainless steel kitchenware are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%.
Under the Customs Act 1901, the CEO has specific obligations when handling a TCO application. First, the CEO must determine if the application is valid and not in respect of goods specified in section 269SJ, which are ineligible for TCOs. Then, the CEO must ascertain if the application meets the core criteria outlined in section 269C. If the CEO is satisfied with the application, they must make a written TCO as per section 269P(3). Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO. McPhersons Consumer Products' application did not receive any opposing submissions, and the TCO was published in the Gazette on the date of the application, 29 October 2008.
The Customs Act 1901 outlines various consequences for breaches of its provisions. Section 269S(1) states that TCOs are effective from the date of application, and this applies to TCO No. 0837716, which came into force on 29 October 2008. The Act ensures that the TCO does not disadvantage any person or impose liabilities on any person (other than the Commonwealth) in respect of actions taken before the TCO's registration date. Importers of the affected goods will benefit from the TCO, as they can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 can lead to various penalties and consequences. While the specific penalties for breaches are not detailed in the Explanatory Statement, they could include fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties for breaches of customs legislation are typically set out in the Customs Act itself and can vary based on the specific offence and circumstances. It is essential for parties governed by the Act to adhere to its provisions to avoid any potential penalties or consequences.