EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837720
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 pastry brushes on 30 October 2008.
Instrument
TCO No 0837720 was made on 16 January 2009. It declares that those certain pastry brushes 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. 0837720 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and regulations, including the creation of Tariff Concession Orders (TCOs) to offer preferential rates on specific goods. This legislation aims to address the economic and trade needs of various sectors by providing tariff concessions that can stimulate industry growth and enhance competitiveness. TCO No. 0837720, issued in 2009, is an example of such an order, providing a tariff concession for certain pastry brushes, which became effective from the date of the application, 30 October 2008. The objective of this particular TCO, as per the Act, is to ensure that no substitutable goods are produced in Australia, thus qualifying the applicant's goods for a reduced customs duty rate. This mechanism benefits importers by potentially allowing them to claim refunds on duties paid prior to the concession's effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, pertains to the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who wishes to apply for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The Act is applicable across the Commonwealth of Australia and is administered by the CEO, who is responsible for determining whether an application for a TCO meets the core criteria. If the application is approved, the CEO issues a written order, a TCO, which specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. The TCO provides relief from customs duty for the specified goods, which, in the case of McPhersons Consumer Products Pty Ltd, pertains to certain pastry brushes. The TCO does not disadvantage any person or impose liabilities for actions taken prior to the order's registration.
Key Provisions
The Customs Act 1901 (section 269F) provides a framework whereby a Tariff Concession Order (TCO) may be applied for and granted by the Chief Executive Officer of Customs (CEO). An application for a TCO can be submitted by any person (section 269F) and, if the CEO is satisfied that the application pertains to goods not listed in section 269SJ, the application must be assessed against the core criteria (section 269C). If the CEO is satisfied that the core criteria are met, a TCO will be issued (section 269P(3)). The core criteria, defined in section 269C of the Act, require that, on the day the application was lodged, there were no substitutable goods produced in Australia in the ordinary course of business. These terms are defined in sections 269D, 269E and 269F of the Act. TCO No. 0837720, made on 16 January 2009, applied to certain pastry brushes, declaring them to be goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, since the CEO was satisfied that no substitutable goods were produced in Australia. The TCO came into force on 30 October 2008, the day the application was lodged (section 269S(1)). The TCO does not affect the rights of any person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. However, the rights of importers will be beneficially affected, with importers of such goods able to apply for a refund of duty on goods imported since the TCO came into force.
The Customs Act 1901 imposes several obligations on the CEO. When a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). The CEO must also decide whether the application meets the core criteria (section 269C). If the CEO is satisfied that the application meets the core criteria, a TCO must be issued (section 269P(3)). The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. However, the explanatory statement does not specify any offences, penalties, or civil/criminal consequences for breach in relation to TCOs. It is likely that any breach of the Act would be dealt with in accordance with the general provisions of the Act, which may include fines or imprisonment. The maximum penalties for offences under the Customs Act 1901 vary depending on the offence and may include fines of up to $22,000 for individuals and $110,000 for corporations, as well as imprisonment for up to five years. However, the specific penalties for breach of the Act in relation to TCOs are not specified in the explanatory statement.