EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837721
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 stickers in various shapes on 30 October 2008.
Instrument
TCO No 0837721 was made on 16 January 2009. It declares that those certain stickers in various shapes 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. 0837721 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. 0837721 was enacted in 2009 as an instrument under the Customs Act 1901. This legislation addresses the issue of applying for tariff concessions for specific goods that are not produced in Australia. The Customs Act 1901 provides a framework through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on goods that are the subject of such orders. The policy objective behind this instrument, as stated in the explanatory statement, is to facilitate tariff concessions for goods where no substitutable goods are produced in Australia, thus benefiting importers by potentially reducing their customs duties.
The enacting body, the Parliament of Australia, established this mechanism to streamline the process of applying for tariff concessions and to ensure that the rights of importers are protected. The Tariff Concession Instrument No. 0837721 was created following an application by McPhersons Consumer Products Pty Ltd for certain stickers in various shapes, where the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO. This instrument does not impose any liabilities on persons and allows importers to apply for refunds of duty on goods imported since the day the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0837721 under the Customs Act 1901 applies to specific goods for which an application for a Tariff Concession Order (TCO) has been made, such as certain stickers in various shapes in the case of McPhersons Consumer Products Pty Ltd. This Act allows for the application of lower rates of customs duty on goods specified in a TCO, provided the application meets the core criteria outlined in the Act, including the absence of substitutable goods being produced in Australia in the ordinary course of business. The application process involves the Chief Executive Officer of Customs evaluating whether the application meets these criteria and, if satisfied, issuing a TCO that declares the applicable tariff item for the goods. The Act's jurisdictional reach extends nationally, as it is an instrument under the Commonwealth's Customs Act 1901. There are specific exclusions, such as goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The TCO's commencement is retroactive to the date of application lodging, ensuring that rights and liabilities of parties are protected from adverse effects prior to the order's registration.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) through section 269F (1). Section 269C states that an application for a TCO will meet the core criteria if, on the day of application, no substitutable goods are produced in Australia in the ordinary course of business. A TCO applies a lower rate of customs duty to goods specified in the order. If the CEO determines that an application meets these core criteria, they are required to make a written order (the TCO) under section 269P (3) specifying the tariff item applicable to the goods in question.
Entities or individuals seeking a TCO must apply to the CEO in accordance with section 269F of the Act. Once an application is accepted, the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be granted, as per section 269K (1). In this case, McPhersons Consumer Products Pty Ltd applied for a TCO concerning certain stickers in various shapes on 30 October 2008, and no submissions were received opposing the application. The CEO issued TCO No. 0837721 on 16 January 2009, declaring that the stickers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate set at free instead of the general rate of 5%.
Under section 269S (1) of the Act, the TCO is considered effective from the date the application was lodged, in this case, 30 October 2008. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring no one is disadvantaged or imposed with liabilities for actions taken prior to the TCO's effective date. Importers of the affected goods can apply for a refund of duty on goods imported since the TCO's effective date, as stipulated in paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements set out in the Customs Act 1901 can result in both civil and criminal penalties. For instance, section 282 of the Act outlines that wilfully making a false statement or providing false information can lead to fines or imprisonment. Additionally, section 286 stipulates that knowingly importing goods in contravention of the Act can result in penalties, including fines of up to 10,000 penalty units or imprisonment for up to five years, or both, for individuals, and higher penalties for corporations. These provisions underscore the importance of adhering to the Act's requirements to avoid legal repercussions.