EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837722
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 baby soothers on 30 October 2008.
Instrument
TCO No 0837722 was made on 16 January 2009. It declares that those certain baby soothers 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. 0837722 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 provides a framework for the administration of customs duties and the regulation of imports and exports. Specifically, Part XVA of the Act allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can reduce the rate of customs duty on certain goods. The Tariff Concession Instrument No. 0837722 was enacted to address the issue of applying for tariff concessions on specific goods, in this case, baby soothers, by providing a mechanism through which the CEO can assess and grant such concessions if certain conditions are met. The CEO was satisfied that no substitutable goods were produced in Australia in the ordinary course of business for the baby soothers in question, meeting the core criteria set out in the Act. Consequently, the instrument declares that these baby soothers are subject to a free rate of duty under the Customs Tariff Act 1995, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods, granting them a lower rate of customs duty than that specified in the Customs Tariff Act 1995. A TCO can be applied for by any person, provided the goods in question do not fall under the exclusions outlined in section 269SJ of the Act and meet the core criteria detailed in section 269C. The application process requires that no substitutable goods, as defined in section 269D, are produced in Australia in the ordinary course of business at the time of application. If the CEO is satisfied that the application meets these criteria, a written order is made, and the goods are assigned to a prescribed item of Schedule 4 to the Tariff, as specified in the order.
Geographically, the Act applies to the Commonwealth of Australia, with the TCO process administered nationally by the CEO. Any person can apply for a TCO, and once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed. In this instance, TCO No. 0837722 was made for certain baby soothers, effective from 30 October 2008, when the application was lodged, without any submissions opposing the TCO. The TCO does not affect pre-existing rights or impose liabilities on any person other than the Commonwealth, and it benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 provides for the creation of Tariff Concession Orders (TCOs) under Part XVA, which allow for a reduced rate of customs duty on certain goods. Section 269F of the Act permits a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. For the application to be considered, it must not relate to goods specified in section 269SJ, which are those that cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria outlined in section 269C. According to this section, the application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ are defined in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order, which is the TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties include ensuring that any application for a TCO is valid and does not pertain to goods listed in section 269SJ. The CEO is obligated to assess the application against the core criteria and, if satisfied, to create a TCO. Additionally, the CEO must publish a notice in the Gazette, inviting any person who might have objections to the TCO to lodge a submission. In this case, no submissions were received, indicating that the CEO proceeded to make the TCO.
The Act also includes provisions regarding the commencement of the TCO, which, according to section 269S, is deemed to come into force on the day the application was lodged. For TCO No. 0837722, this was 30 October 2008. Importantly, the TCO does not affect any rights of persons other than the Commonwealth, nor does it impose any liabilities on them in respect of actions taken before the TCO’s effective date. Importers, however, will be able to apply for a refund of duty on goods imported since the TCO’s effective date, as per paragraph 126(1)(r) of the Regulations.
While the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach, any misuse or fraudulent application for a TCO could potentially be subject to broader penalties under the Customs Act. Such actions might be considered as violations of the Customs Act provisions, which could result in criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach.